Day Trader Charged in Brokerage Account Takeover Scheme
FOR IMMEDIATE RELEASE
Washington D.C., Oct. 30, 2017 —
The Securities and Exchange Commission today charged a day trader based in the Philadelphia area with participating in a scheme to access the brokerage accounts of more than 100 unwitting victims and make unauthorized trades to artificially affect the stock prices of various companies.
The SEC alleges that Joseph P. Willner generated at least $700,000 in illicit profits by trading in the same securities in his own accounts and taking advantage of the artificial stock prices that resulted from the unauthorized trades placed in the victims’ accounts.
Willner’s activities were detected despite his efforts to disguise his real identity while communicating with at least one other individual through online direct messaging applications using a pseudonym, according to the SEC’s complaint. “Legal trading too hard” is among the online messages noted in the SEC’s complaint. To mask his payments to the other individual as part of a profit-sharing arrangement, Willner allegedly transferred proceeds of profitable trades to a digital currency company that converts U.S. dollars to Bitcoin and then transmitted the bitcoins as payment.
The SEC’s investigation is continuing.
“Account takeovers are an increasingly significant threat to retail investors, and it is exactly the type of fraud our new Cyber Unit is focusing on,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “We are committing substantial resources to combating cyber-based threats to protect investors and our markets from intruders who manipulate the system for their own illicit gain.”
The SEC’s complaint, filed in U.S. District Court for the Eastern District of New York, alleges that Willner engaged in fraud and market manipulation in violation of federal securities laws and related SEC rules. The SEC seeks the return of ill-gotten gains plus interest and penalties and a permanent injunction.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York and the U.S. Department of Justice Criminal Division’s Fraud Section filed criminal charges against Willner.
The SEC’s investigation has been conducted by Susan Cooke Anderson, Eric Forni, Marcus Fruchter, Andrew McFall, Mark Albers, Darren Boerner, and John Marino with assistance from Alex Lefferts in the Center for Risk and Quantitative Analytics and Stuart Jackson in the Division of Economic and Risk Analysis. The case is being supervised by Chief of the Cyber Unit Robert Cohen, Chief of the Market Abuse Unit Joseph Sansone, Kathryn Pyszka, and Michele Perillo. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York, the Department of Justice’s Criminal Fraud Section, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.