http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=Z-C:*SEC-1383308&symbol=*SEC&news_region=C
SEC wins default against student stock manipulator
2007-06-22 15:40 ET - Street Wire
by Mike Caswell
The U.S. Securities and Exchange Commission has secured a default judgment against Aleksey Kamardin, the 21-year-old Florida student who allegedly manipulated 17 stocks using hijacked brokerage accounts. The stocks included Vancouver-based Quantum Energy Inc. and Northwater Resources Inc.
The judgment orders Mr. Kamardin to disgorge $88,045 in gains from the scheme and pay a $130,000 civil penalty. He did not answer the allegations and appears to have ignored the case. The SEC says Mr. Kamardin, a U.S. citizen, fled the country by flying to Kalingrad, Russia, on Feb. 22, 2007. (All figures are in U.S. dollars.)
The SEC charges Aleksey Kamardin
The SEC filed a civil fraud suit against Mr. Kamardin on Jan. 25, 2007, alleging he hacked into on-line brokerage accounts to bid up stocks he owned. Mr. Kamardin purchased thinly traded stocks in his own account, then used victim accounts to buy the same stocks. When the shares went up, he sold, largely to his own dishonest bids.
For example, on Aug. 11, 2006, Mr. Kamardin bought 7,460 shares of Vancouver-based Northwater between $1 and $1.15 in his personal account. The same day he used hacked accounts at E-Trade, J.P. Morgan and Scottrade to buy up the the stock.
Thinly traded Northwater rose to a 52-week high of $2.09 on volume of 748,220 shares that day. Mr. Kamardin sold his stock at $2, for a profit of $6,953. Northwater last traded at eight cents.
The SEC says he repeated this formula with 17 stocks, and made money on 14 of them. He sent the profits offshore after moving them to an account in the name of his Russian-born roommate.
The other Canadian companies were Vancouver pink sheets listing Quantum Energy Inc. and Montreal's Mamma.com Inc. The remaining stocks are U.S. companies, mostly thinly traded on the OTC Bulletin Board.
SEC wins by default
The SEC filed a motion for a default judgment on May 22, noting Mr. Kamardin has failed to make an appearance, has not answered the complaint and has not contacted the SEC.
Florida District Court Judge Susan Bucklew granted the motion in an order filed Wednesday. With Mr. Kamardin apparently out of the country, Judge Bucklew left it open to the SEC to obtain a civil contempt order to enforce the judgment.
The SEC warns users of on-line brokerage accounts to be wary of identity theft. Thieves can use software programs that log key strokes, allowing them to obtain user names and passwords.
Personal firewalls and security software are a must-have for people doing on-line financial transactions, the SEC says.