In the US, two traders set up a fake brokerage company to steal money from novice investors
In the US, a lawsuit is unfolding against two traders from Michigan, who created a fake brokerage company. Fraudsters attracted novice investors and stole their money. The criminals hoped that no one would notice their activities, since “newcomers will lose money anyway, ” Bloomberg writes .
Fraudsters created a brokerage company called Nonko Trading. Using their experience in the financial sector, they developed the terms of cooperation, which seemed very beneficial for novice traders.
For example, they offered low commissions (below $ 0.006 per share), the minimum required deposits ($ 2500 and below), and a leverage of 20: 1 (for each own dollar invested, the investor could buy shares at $ 20). Not a single legal broker in the United States has such conditions, since this is contrary to current legislation.
Further, many of Nonko Trading's clients provided for trading not real, but test accounts with virtual money. At the same time, their real deposits were simply stolen. The victims chose the most inexperienced clients, as well as traders who have already lost large sums earlier. The fraudsters thought that such traders would make more losing trades and were less likely to want or have time to withdraw the balance of their funds before the deposit was canceled.
Nobody should have noticed the theft of their money, since they should have been lost anyway. However, the scheme was disclosed, and now organizers of fraud face a serious jail sentence.
How else to cheat investors
This is not the first time that investors fall victim to manipulation. For example, in 2013, the case of the 62-year-old Scotsman Alan Craig (Alan Creig) was tried. He created two fake Twitter accounts that were disguised as real-life accounts of research and analytical companies Muddy Waters Research and Citron Research. The fraudster placed in the accounts of "research companies" information about the status of organizations whose shares are traded on the stock exchange, which caused fluctuations in the shares of these securities.
For example, in 2013, Craig reported in a fake account that an investigation into a fraud investigation was launched against the American manufacturer Audience audio systems. This news led to a 28% drop in the company's shares for a short time, after which trading was suspended.
Fake messages in social networks is not the only way to misinform participants of exchange trading. So in July 2015, Twitter shares jumped in price due to the message that the microblogging service would be sold for $ 31 billion. The news was posted on a fake website that looked similar to Bloomberg.com. After the fake news was replicated by some media, Twitter shares jumped 5% in price, and after its denial also fell sharply.
Another way of misinformation was the release of fake press releases. In the spring of 2015, 37-year-old Bulgarian citizen Nedko Nedev distributed a press release on behalf of the defunct company PTG Capital Partners Limited about its purchase of Avon Products.
After that, Avon stock prices rose by almost 20%, and the attacker earned on this $ 5,000. Subsequently, both fraudsters were charged with fraud.