Bay Area Trading Firm Falls Victim to Online Hijacking Scam, Costing Customers Millions
The Securities and Exchange Commission filed a lawsuit in San Francisco this week, claiming Igors Nagaicevs' clever but illegal scheme was a violation of the Securities Exchange Act, and cost his victims more than $2 million in losses.
According to the claim, Nagaicevs, 34, hijacked online accounts at least 159 times over the course of a year, and then traded secure stocks as an authorized trader as a way to manipulate the prices.
Between June 2009 and August 2010, some 250 individuals traded as many as 300 million shares per month on U.S. exchanges under an account in the name of Alchemy Ventures, Inc., of San Mateo, according to the SEC. Nagaicevs generated a $7,000 profit from this firm alone, according to the lawsuit.
When the SEC analyzed Nagaicevs' scheme, it found that he had established a pattern in all 159 occasions of trading.
It took Nagaicevs no more than 20 minutes to crack into the accounts and begin making successful trades.