The Securities and Exchange Commission (SEC) filed a lawsuit against 18 Chinese traders for allegedly engaging in market manipulation scheme.
According to the Commission, it obtained an emergency court order to freeze the assets of the defendants, who are primarily based in China.
In its complaint, the SEC alleged that the Chinese traders used dozens of accounts at various brokerage firms to manipulate the prices of more than 3,000 publicly traded securities or stocks in the U.S. markets.
Accused Chinese traders allegedly made over $31 million in illegal profits
The defendants allegedly made more than $31 million in illegal profits by creating false appearance of trading interests and activities in particular stocks. In short, the accused Chinese traders artificially drove stock prices up or down.
Additionally, the Commission alleged that the defendants usually at least two brokerage accounts when manipulating stock prices.
First, they used one account (referred to as helper account) to place multiple small sale or purchase orders to create a downward or upward pressure on the price of a particular stock.