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Hack, Pump And Dump
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"Wow, wow," Cancio said, upon hearing the allegations. "That's unbelievable."
The following day, Cancio said, his company's share price had plummeted to 13 cents, where it has been ever since. TD Ameritrade, the third-largest online broker by volume, has restricted online trade on the company's stock.
Cancio said that on Aug. 24 he was negotiating a deal to buy 14 television stations, and when he saw the price surge, he began to suspect the stations' owner of insider trading.
The owner denied it, but the deal soured, and with the share price down, Cancio said, the deal is on the rocks. "We were knocking on the door of a multibillion market," he said. "We haven't seen any progress. It's all due to that particular day."
On Aug. 28 and Aug. 29, Kamardin wired proceeds from his E-Trade account to a Wachovia bank account and then transferred the funds to an account owned by his Russian-born roommate. The roommate wired the money to a bank account in Riga, Latvia, the SEC alleges.
E-Trade, which regularly monitors unusual activity, at some point became concerned and alerted the SEC and the FBI of possible fraudulent activities, said sources familiar with the matter.
Kamardin is charged with securities fraud. The SEC is seeking return of the money and payment of civil penalties.
Staff researcher Richard Drezen contributed to this report.
