Russian National Accused of $31M Trading Scheme Using Fake Identities

U.S. regulators have unsealed against a Russian citizen who is accused of masterminding a multi-year fraud that used hacked brokerage accounts to manipulate stock prices and make millions of dollars in illegal profits. 

This is a stark reminder of the shady connections between cybercrime and financial markets. The plan lasted over ten years and shows how international cybercriminals are becoming more of a menace to America’s investment infrastructure.

Figuring Out the Ten-Year Lie

Dmitrii Yevgenyevish Kushnarev is accused of running a complicated scheme from 2014 to 2021 that compromised hundreds of legal U.S. brokerage accounts. Kushnarev is believed to have opened fake accounts at large financial firms using at least 20 fake identities and then mixed them in perfectly with stolen credentials from actual investors.

These phony identities were the key to a larger plot that let him and other unknown co-conspirators make coordinated trades that were meant to artificially raise the prices of securities.

The primary strategy was to place fake orders on both real hacked accounts and fake ones. Kushnarev’s network raised share prices in short bursts by flooding the market with purchases for targeted stocks that were listed on the New York Stock platform (NYSE),, or over-the-counter (OTC) markets.

When prices reached their highest point, the gang sold their stocks at those high prices, making a lot of money before the fake pumps fell apart. This “pump-and-dump” version took advantage of account holders who didn’t know their portfolios were being used against the market.

The Fraud’s Evolution: From Stocks to Options

By 2019, the enterprise had grown to include derivatives, which made it more complex and risky. According to reports, Kushnarev sold out-of-the-money options, calls, and puts with strike prices far from current market levels, directly into the . These instruments were set up to make people want to acquire the underlying equities, which drove prices up even more for the fraudsters’ advantage. 

Victims, who were mostly small businesses or retail investors, had trades done without their permission that hurt their balances and made the plan more profitable.

According to the investigation, these operations brought in roughly $31 million in gross trading earnings over the course of seven years, with Kushnarev personally making about $1.5 million in profits. The scale shows how one person, using digital anonymity, might steal a lot of money from a system that relies on confidence and quick execution.

A Crackdown By Regulators and Wider Effects

The U.S. has made significant claims against Kushnarev, saying he broke the Securities Act of 1933 and the Securities platform Act of 1934. These laws are meant to stop fraud, manipulation, and trading in unregistered securities.

The consequences could include fines, having to give up gains, and being barred from trading in the future. Even if it is still hard to get someone out of , the case shows how serious the SEC is about fighting cross-border cyber-financial dangers.