SEC Freezes Assets in International Manipulative Trading Scheme
Last week, The Securities and Exchange Commission announced charges against five foreign traders for executing illegal matched trades in the stock of Medico International, Inc. (MDDT). The SEC also obtained an emergency court order freezing assets held in brokerage accounts of the defendants, including approximately $144,000 that otherwise could have been wired offshore, and hundreds of thousands of shares of MDDT stock.
According to the SEC’s complaint filed in the U.S. District Court for the Southern District of New York on June 19, 2019, the traders from China, Singapore, and Malaysia attempted to manipulate the market for MDDT stock by entering matched orders to buy and sell MMDT at substantially the same times, sizes, and prices. The SEC alleges that trades involving these five seemingly unrelated individuals from three different countries accounted for 70% of the volume in MDDT over the period in which they traded. As described in the Complaint, IP records show that at least three of the defendants’ brokerage accounts were likely accessed by the same user or users while trading MDDT.
The SEC also suspended trading in MDDT on June 20, 2019. The complaint was filed against Kit Mun Chan, Lau Kean Chong, Chong Poui Fan, Binji Lu, and Youn Chien Wong.
“We took swift action to protect the public from investing based on the artificial liquidity and volume created by this alleged scheme,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “Notwithstanding that these overseas defendants attempted to mask their locations by using virtual private networks, we were able to halt the misconduct before substantial investor harm occurred.”
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