10 CW 2217
UNITED STATES·DJSTRlCl' COURT
SOUTHERN DISTRICT OF NEW YORK
U.S. SECURITIES AND EXCHANGE COMMISSION, :
BROCO INVESTMENTS, INC. and
Plaintiff United States Securities and Exchange Commission ("Commission")
alleges as follows:
The Commission files this emergency action to halt an ongoing fraud by .
BroCo Investments, Inc. ("BroCo") and its president, Valery Maltsev ("Maltsev"). This
action alleges violations of the federal securities laws by Maltsev, BroCo, and/or
individuals acting in concert with them, by repeatedly hijacking the online brokerage
accounts of unwitting investors using stolen usemames and passwords and subsequently
placing unauthorized trades through the compromised accounts. In almost every
instance, prior to intruding into these accounts, using an account they controlled at
Genesis Securities LLC ("Genesis"), the Defendants acquired positions in the same
securities that were the subjects of the unauthorized trades in the compromised accounts.
Minutes after acquiring these positions, and without the compromised accountholders'
knowledge, the Defendants, and/or individuals acting in concert with them, placed scores
of unauthorized buy orders at above-market prices using the compromised accounts.
After these unauthorized buy orders were placed, the Defendants sold the positions held
in their own account - positions they had established only moments earlier - at the
artificially inflated prices. In other instances, the Defendants profited by covering short
positions previously established in their account while placing unauthorized sell orders
through the compromised accounts at substantially lower prices. From August 2009 to
the present, these transactions have created the appearance of legitimate trading activity
and have artificially affected the prices of at least thirty-eight issuers.
From August 2009 to December 2009, as a result of coordinating their
own trades with those effected during the unlawful int