Tags: Texan | Stock | Price | Cyber-Scam

Texan Gets 6 Years for Stock Price Cyber-Scam

Monday, 13 May 2013 07:38 PM

 

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A Texas man was sentenced to about six years in prison for scheming to manipulate stock prices through an e-mail spam campaign.

Christopher Rad, 44, of Cedar Park, Texas, was the "central organizer" of what federal officials said was an international pump-and-dump scheme that used promotional e-mails to hype stocks in which he and other members of the ring had shares, the U.S. Justice Department said in an e-mailed statement. U.S. District Judge Joel A. Pisano in Trenton, New Jersey, imposed the 71-month sentence Monday, according to a court filing.

The e-mails were sent using global networks of hijacked computers known as botnets, which cyber security experts say are controlled by malicious software and used to send spam e-mails without their owners' knowledge.

"Christopher Rad's use of hackers to drive his pump-and-dump scheme illustrates a trend toward the modern mechanization of old-school scams," U.S. Attorney Paul Fishman said in the statement. "Law enforcement is constantly anticipating and adapting as criminals operate in a more virtual -- and more global -- world."

Rad, who made about $2.8 million from the scheme, was convicted of six counts, including conspiring to further securities fraud using spam, and conspiring to transmit spam through unauthorized access to computers, according to the statement.

From as early as November 2007 through February 2009, Rad conspired with stock promoters to manipulate the price and volume of dozens of particular stocks, including stocks with ticker symbols RSUV, QRVS, VSHE, SVXA and ASIC, to later sell them at an artificially inflated price, according to the statement.

Rad’s lawyer, Francis Montenegro, didn’t immediately return a call seeking comment on the sentence.

The case is U.S. v. Rad, 11-cr-00161, U.S. District Court for District of New Jersey (Trenton).

© Copyright 2014 Bloomberg News. All rights reserved.

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