NEWARK, N.J. (AP) — A Florida man who federal prosecutors in New Jersey say bragged about making up to $50 million a month by running an international stock manipulation scheme using a practice known as layering has been released on $750,000 bond.
Aleksandr Milrud, 50, of Aventura, Florida, made his initial court appearance Wednesday in Newark after being arrested in his home state last month and charged with wire fraud and securities fraud conspiracy.
He was released by Judge Michael Hammer and barred from trading in securities while he is on home detention in Florida. Milrud's attorney, Michael Bachner, says he is still reviewing the allegations.
It is the first federal securities fraud prosecution of someone accused of using the high-frequency trading strategy, according to U.S. Attorney Paul Fishman.
Prosecutors said Milrud recruited stock traders in China and Korea to place high-speed buy or sell orders and then quickly cancel them. The activity would artificially raise or lower the stock prices and allow traders to exploit the price moves to make profits on trades.
High-speed traders use computers to sift through price changes and data and news feeds to buy and sell stocks in fractions of a second.
Milrud bragged to an informant that the scheme yielded as much as $600,000 in a day and generated between $1 million and $50 million per month, authorities said. The informant, who owned an off-shore broker-dealer, recorded Milrud on several occasions describing his trading strategies in detail, they said.
The wire fraud count carries a maximum sentence of 20 years upon conviction, while the conspiracy fraud carries a five-year maximum sentence.