Elinor Mills reports:
A Cyprus-based company accused of manipulating stocks on U.S. exchanges via compromised trading accounts denied the allegations on Friday, placing blame on “Russian swindlers.”
A U.S. federal judge in New York agreed to freeze the assets of BroCo Investments on Tuesday, after the U.S. Securities and Exchange Commission filed a complaint alleging that BroCo and its president, Valery Maltsev, made more than $255,500 by placing unauthorized trades on the Nasdaq and New York Stock Exchange through the compromised investor accounts.
BroCo says a Genesis Securities account under investigation for having made legitimate trades in coordination with those made via the compromised accounts was opened on behalf of a client.
“The equivocal account belongs to our client,” Dmitry Zelenko, head of BroCo’s legal department, said in a statement.
[…]
BroCo intends to cooperate with criminal proceedings against those allegedly involved in stealing usernames and passwords of accounts, then, among other actions, buying securities via the compromised accounts at inflated prices, BroCo President Maltsev said. By doing this, the company intends to help victims recover an alleged total of $600,000 in damages and to clear its reputation in the U.S. court.
Read more on CNET.
A statement by the president of BroCo on BroCo’s site says, in part:
I underline that neither me no BroCo are associated with trading on this specific account.
BroCo as an official sub-broker of Genesis operates on stock market of the USA. We register accounts for all clients wishing to trade on the USA stock market and therefore have commission remuneration. All largest actors of the Russian stock market do apply the same scheme for operations in Genesis.
It means that accumulated omnibus account is registered in the name of our company in Genesis and within the it’s frames our Clients’ accounts are opened. Full procedure for registering Client’s account of this type is introduced on our web-site in details. These accounts are certainly opened officially, we provide Genesis with complete information about holders of these accounts in compliance with Genesis’ demands and procedures as well as all required documents by our Clients.
The account suspected in price manipulation in market belongs to Client of the company. The client performed his own trading and traded at his own responsibility.. Our company together with Genesis only procures technical and brokerage facilities. Thus BroCo company is not associated with trading on above-mentioned account.
In the nearest time we will carefully study all claims of USA Securities and Exchange Commission. I can assure that all claims upon securities are civic and in fact represent request for all relevant and essential documents of Client, it is not a criminal case.
Neither of the statements on their web site refer to stolen usernames and passwords.