Bitcoin Forum
December 08, 2016, 12:23:15 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: A recent law case of manipulating stock exchange by compromising accounts  (Read 1009 times)
dennis_sweden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
June 21, 2011, 12:28:37 PM
 #1

In Securities and Exchange Commission v. BroCo Investments and Valery Maltsev, Civil Action No. 10-CIV-2217 (S.D.N.Y.) in March 2010, an investment firm, BroCo, illegally gained access to brokerage accounts of investors, placed orders from those intruded accounts in stock that BroCo owned, at a substantially higher than market price. So BroCo made "killer-deals" wheras the legal holders of those accounts made substantial losses; the total amount of losses suffered by this illegal practice was nearly $ 1 million.

BroCo subsequently attempted to withdraw $ 300.000, however Securities and Exchange Commission filed a lawsuit prohibiting them from removing/destroying all assets and documentation of trades, which was granted by a federal judge.

The complaint specified that BroCo had:

 
Quote
employed devices, schemes or artifices to defraud;
(b) made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light ofthe circumstances under which they were made, not misleading; or
(c) engaged in acts, practices or courses of business which operated or would
operate as a fraud or deceit upon other persons.

http://www.sec.gov/litigation/complaints/2010/comp21452.pdf

On June the 17th 2010 "the Court found that there is a substantial likelihood that the Commission will succeed in proving that defendants "participated in and substantially assisted fraudulent trading in Broco's account at Genesis Securities, thereby establishing liability under Section 10(b) and 17(a) as a primary violator or, at the least, as an aider and abettor."

and that:  [BroCo]achieved these results by consistently doubling and sometimes tripling or even quadrupling his subaccount balance in a single day's worth of trading. Even with leverage … those returns are unattainable in the real world. Examination of the pattern of daily trading also raises a strong inference of fraud.[/quote]

http://www.sec.gov/litigation/litreleases/2010/lr21571.htm

Although I have not found the final decision by the court or Commission, the application of the rulingon the 25th of June regarding Mtgox and the person/people who have, allegedly, perpetrated fraud, could be:

Mtgox would have to apprehend the illegally obtained bitcoins or dollar value from the, alleged, hacker. As I stated in http://forum.bitcoin.org/index.php?topic=20562.msg256905#msg256905 a "Clearly erronous trade" does not include illegal access", and a rollback option lacks any authority according to jurisprudence.

So all claims that Mtgox have made hitherto, which I am aware, of are not in accordance with the law, despite Mtgox referring to various legal practices. Due to this fact, and that no-one is in the know as to what has happened, Mtgox should make public, in some way or form (maybe not to ever-one on this board, an earlier poster suggested some kind of panel with senior members/earlier adopters) relevant information, and that all parties should at least acquire basic knowledge of what happened, instead of being forced to resort to hypothesizing on this board.

How can you tell when a politician is lying? His lips are moving. A little girl asked her father, 'do all fairy tales begin with "Once upon a time"? The father replied, 'No, some begin with - If I am elected.' How come political leaders don't have all the answers until they write their memoirs?
1481156595
Hero Member
*
Offline Offline

Posts: 1481156595

View Profile Personal Message (Offline)

Ignore
1481156595
Reply with quote  #2

1481156595
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481156595
Hero Member
*
Offline Offline

Posts: 1481156595

View Profile Personal Message (Offline)

Ignore
1481156595
Reply with quote  #2

1481156595
Report to moderator
1481156595
Hero Member
*
Offline Offline

Posts: 1481156595

View Profile Personal Message (Offline)

Ignore
1481156595
Reply with quote  #2

1481156595
Report to moderator
Horkabork
Full Member
***
Offline Offline

Activity: 140



View Profile
June 21, 2011, 12:33:21 PM
 #2

Step One: Please prove that the United States Securities and Exchange Commission has oversight over Bitcoin exchange transactions and, specifically, Mt. Gox. Because, if that case applies, we're all in the shit, not just Mt. Gox.

Oh god they're going to come after me too. I've been day trading bitcoins without a $25k account.

Me: 15gbWvpLPfbLJZBsL2u5gkBdL3BUXDbTuF
A goat: http://i52.tinypic.com/34pj4v6.jpg
dennis_sweden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
June 21, 2011, 12:38:47 PM
 #3

I have stated perfectly obvious that I'm not claiming that the law is applicable to Mtgox; rather that the statements from Mtgox are misleading and that Mtgox must provide proper information of what has occurred.

How can you tell when a politician is lying? His lips are moving. A little girl asked her father, 'do all fairy tales begin with "Once upon a time"? The father replied, 'No, some begin with - If I am elected.' How come political leaders don't have all the answers until they write their memoirs?
Horkabork
Full Member
***
Offline Offline

Activity: 140



View Profile
June 21, 2011, 12:45:37 PM
 #4

I have stated perfectly obvious that I'm not claiming that the law is applicable to Mtgox; rather that the statements from Mtgox are misleading and that Mtgox must provide proper information of what has occurred.

Yeah, I'm not disagreeing with you on what they should do, but "must" do is something else. You used the word "hitherto" so, based on this fantastic law lingo, I assumed that you were a young, hotshot attorney bringing up an applicable case. If you're not actually using this case to argue that Mt. Gox has to do anything, then I guess you don't need to prove that the case applies. Hell, here's a case that doesn't apply either:

http://en.wikipedia.org/wiki/Martin_v._Ziherl

"Martin v. Ziherl, 607 S.E.2d 367 (Va. 2005), was a decision by the Supreme Court of Virginia holding that the Virginia criminal law against fornication was unconstitutional. The court's decision followed the 2003 ruling of the U.S. Supreme Court in Lawrence v. Texas, which established the constitutionally-protected right of adults to engage in private, consensual sex."

Whoa. Mt. Gox really needs to stop this consensual sex business.

Me: 15gbWvpLPfbLJZBsL2u5gkBdL3BUXDbTuF
A goat: http://i52.tinypic.com/34pj4v6.jpg
bitsalame
Donator
Hero Member
*
Offline Offline

Activity: 616


Preaching the gospel of Satoshi


View Profile
June 21, 2011, 12:54:51 PM
 #5

I have stated perfectly obvious that I'm not claiming that the law is applicable to Mtgox; rather that the statements from Mtgox are misleading and that Mtgox must provide proper information of what has occurred.

Yeah, I'm not disagreeing with you on what they should do, but "must" do is something else. You used the word "hitherto" so, based on this fantastic law lingo, I assumed that you were a young, hotshot attorney bringing up an applicable case. If you're not actually using this case to argue that Mt. Gox has to do anything, then I guess you don't need to prove that the case applies. Hell, here's a case that doesn't apply either:

http://en.wikipedia.org/wiki/Martin_v._Ziherl

"Martin v. Ziherl, 607 S.E.2d 367 (Va. 2005), was a decision by the Supreme Court of Virginia holding that the Virginia criminal law against fornication was unconstitutional. The court's decision followed the 2003 ruling of the U.S. Supreme Court in Lawrence v. Texas, which established the constitutionally-protected right of adults to engage in private, consensual sex."

Whoa. Mt. Gox really needs to stop this consensual sex business.

Horkabork: Your comment is irrelevant and misleading.
The point is: MtGox must show transparency to get credibility.
Regulated or unregulated: it is shady as hell.

One of the cornerstones of bitcoins are transparency.
It isn't unreasonable to demand it from the exchanges as well.

Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!