NEW YORK (Reuters) - A self-described day trader who ran a "cyber boiler room" scheme to trade illegally through more than 50 hacked online brokerage accounts, causing over $2 million of losses for brokerage firms servicing those accounts, was indicted on Wednesday, U.S. prosecutors in Brooklyn said.
Joseph Willner, 42, of Ambler, Pennsylvania, was accused of generating more than $700,000 of profit from a fraudulent scheme that prosecutors said ran from Sept. 2014 to May 2017. Ambler is a suburb of Philadelphia.
A lawyer for Willner did not immediately respond to requests for comment.
According to the indictment, Willner used accounts in his own name to sell borrowed shares "short," betting on a decline, while one or more co-conspirators used the hacked accounts to buy the same companies' shares at artificially high prices.
These shares would then be sold at below-market prices to cover the short bets, with Willner keeping the differences, and laundering proceeds to at least one co-conspirator using bitcoin, according to prosecutors and the four-count indictment.
"This case involves a 21st century cyber boiler room, except the buyers were not even aware they were purchasing shares of stock," William Sweeney, assistant director-in-charge of the Federal Bureau of Investigation, said in a statement, referring to holders of the hacked accounts.
Willner faces up to 20 years in prison. He was charged with securities fraud, and conspiracies to commit securities fraud and computer intrusions, wire fraud and money laundering.
The U.S. Securities and Exchange Commission filed related civil charges against Willner last week.
(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)