Russian Citizen Allegedly Orchestrates Account Hacking Scheme, Uses Fake Identities To Generate $31,000,000 in Trading Proceeds: SEC

The U.S. Securities and Exchange Commission (SEC) is charging a Russian national for allegedly masterminding an account hacking scheme to haul in tens of millions of dollars.

In a new press release, the SEC says it’s charging Russian national Dmitrii Yevgenyevish Kushnarev for allegedly orchestrating a scam where hundreds of U.S. brokerage accounts were hacked and used to manipulate stock prices.

Authorities say that between 2014 and 2021, Kushnarev used 20 fake identities to open fake accounts and make profitable trades on hundreds of securities listed on the New York Stock Exchange (NYSE), Nasdaq, or OTC (over-the-counter) markets that were simultaneously being manipulated by other hacked accounts.

Kushnarev and his co-conspirators would allegedly force major brokerage accounts to purchase the targeted equities using the compromised accounts, driving up their prices and allowing the bad actors to sell them at highly inflated prices.

The SEC also says that starting from 2019 to 2021, Kushnarev switched tactics and started selling out-of-the-money options – or calls and puts that if exercised would result in a loss – directly to hacked accounts, once again resulting in inflated prices.

All in all, the SEC alleges that Kushnarev made away with $31 million in gross proceeds from his transactions and $1.5 million in profits. He is charged with violating the Securities Act of 1933 and the Securities Exchange Act of 193, according to the press release.

 

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