Student accused in stock scheme
The SEC says the man, 21, hijacked online accounts to drive up stock prices, then sold.
By Scott Barancik
Published January 26, 2007
Federal authorities are hunting for a 21-year-old Tampa student who allegedly cleared more than $80,000 last summer by hacking into online trading accounts and using the stolen funds to conduct a pump-and-dump scheme.
In a lawsuit filed Thursday, securities regulators accused Aleksey Kamardin of buying over-the-counter stocks via his own eTrade account and then quickly reselling them after unnamed partners pumped up the prices using victims' hijacked accounts. Seventeen penny stocks were targeted.
Kamardin needed just three hours on Aug. 18 to double his investment in one stock: St. Petersburg aircraft developer Cyber Defense Systems Inc.
"It's a total surprise," Cyber Defense CEO Billy Robinson said Thursday. "We never heard anything until now."
Little is known about Kamardin, a U.S. citizen who narrowly escaped an FBI raid at his friend's Clipper Cove Apartments home several months ago and is believed to have fled to Russia. Kamardin's name was not listed in student databases at the University of South Florida or University of Tampa. Attempts to reach FBI and Securities and Exchange Commission officials Thursday were unsuccessful.
But Kamardin's alleged scheme bore a strong resemblance to one the SEC disclosed in December. Both cases involved at least some Russian nationals - Thursday's suit says that an unnamed, Russian-born roommate of Kamardin's was a participant - and in both cases, illegal proceeds were wired to an account in the Baltics. Kamardin's former Tampa roommate could not be reached.
A review of Kamardin's alleged Cyber Defense trades demonstrates the efficiency of his method.
In the typical pump-and-dump scheme, a conspirator buys shares of a target company's stock, distributes falsely positive information about the company via spam and other media i.e. Microsoft Corp. to buy XYZ Inc. for $10-billion, waits for the share price to skyrocket, and then sells his stake. Under Kamardin's alleged scam, however, the "pumping" is achieved by illegally accessing strangers' online trading accounts and using the funds within them to buy the target stock.
The Cyber Defense case shows Kamardin allegedly bought 39,000 shares of Cyber stock one morning for prices ranging from 36 cents to 40 cents per share, used stolen accounts to push the price as high as 85 cents, and then sold all 39,000 shares at 73 cents apiece.
The three-hour profit: nearly $13,500.
"That's a good price," CEO Robinson said jokingly. "I wish it had stayed there."
Though fewer than 90,000 shares of Cyber Defense stock trade per day on average, nearly 1-million traded on Aug. 18. Despite the intraday highs, the stock price had fallen back to 32 cents per share by day's end.
Times staff researcher Angie Holan contributed to this report. Scott Barancik can be reached at firstname.lastname@example.org or (727)893-8751.
$13,500 in three hours
The SEC alleges that Aleksey Kamardin of Tampa made $13,499.19 in just over three hours on Aug. 18 by trading in St. Petersburg-based Cyber Defense Systems Inc. (CYDF). Officials say he used four hijacked brokerage accounts to drive up the stock price to a 52-week high. Here's how it was done:
10:04 a.m. to 10:41 a.m.: Kamardin purchases 39,000 shares of CYDF at prices ranging from 36 cents to 40 cents per share.
12:23 p.m. to 1:20 p.m.: A total of 67,406 shares of CYDF are purchased in a hijacked eTrade account.
12:28 p.m. to 1:31 p.m.: A total of 75,000 shares of CYDF are purchased in two hijacked TD Ameritrade accounts.
12:39 p.m. to 1:11 p.m.: A total of 44,900 CYDF shares are purchased in a hijacked Schwab account.
1:12 p.m.: Kamardin sells all 39,000 of his CYDF shares for 73 cents per share, realizing a $13,499.19 profit.
Source: Securities and Exchange Commission
[Last modified January 25, 2007, 23:53:30]
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