December 5, 2017
On October 30, 2017, the Securities and Exchange Commission filed a Complaint with the United States District Court of the Eastern District of New York against Ambler, Pennsylvania resident Joseph Willner, a day-trader who was also purported to be self-employed in the property management industry.
The SEC alleges that between September 2014 and May 2017, Willner engaged in illegal brokerage account takeover and unauthorized trading scheme in concert with at least one other person (hereafter known as “Individual A”). Directly or indirectly and without authorization, Individual A then accessed at least 110 brokerage accounts outside of regular market hours and used these accounts to place securities trades that artificially affected the stock price of various publicly traded companies. Willner then traded the same securities, generating profits by taking advantage of the artificial stock prices that resulted from the unauthorized trades. He allegedly laundered proceeds to at least one individual using bitcoin. These alleged activities are in violation of several securities industry laws. Companies whose shares were purchases in this alleged scheme included Lawson Products, Inc. (LAWS), Auris Medical Holding AG (EARS), Highway Holdings Limited (HIHO), and First Community Corporation (FCCO).
According to the Complaint, Willner generated at least $700,000 in illicit profits through this scheme and caused the three brokerage firms that serviced the accounts to suffer $2 million in losses.
The SEC seeks a permanent injunction against Willner, enjoining him from engaging in transactions, acts, practices, and courses of business alleged in the SEC Complaint, disgorgement from ill-gotten gains with prejudgment interest, and civil penalties. Willner is charged with securities and wire fraud, money laundering, and conspiracies to commit securities fraud and computer intrusions. He faces up to 20 years in prison.
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