What You Need to Know
- The former broker allegedly orchestrated a market manipulation scheme from at least September 2015 to October 2020.
- He allegedly used at 18 or more securities accounts at 14 different brokerage firms to artificially influence the market prices of more than 2,000 securities.
- The scam started after he left Janney in March 2013.
The Securities and Exchange Commission charged a former broker with running a multi-million dollar market manipulation scheme in which he made coordinated trades between multiple accounts owned by him and his wife at different brokerage firms over the course of at least five years.
O’Brien allegedly made over $9.6 million in net profits from his successful coordinated trading events, the SEC said.
In a complaint filed on Thursday in the U.S. District Court for the Southern District of New York, the SEC alleged James David O’Brien, 50, of Gibbsboro, New Jersey, orchestrated the fraudulent scheme to artificially influence the market prices of more than 2,000 exchange-traded securities via 18 or more securities accounts with 14 different brokerage firms.
According to the complaint, from at least September 2015 to October 2020, O’Brien coordinated trading in at least two different accounts to create the false appearance of trading interest and activity in particular stocks that then enabled him to buy stocks at artificially low prices and quickly sell them at artificially high prices.
What Your Peers Are Reading
Prior to the scheme, O’Brien was registered as a broker with Janney Montgomery Scott from April 2006 until March 2013 and did not become registered with another Financial Industry Regulatory Authority-affiliated firm after that, according to his report on FINRA’s BrokerCheck website.
How the Scheme Worked
The SEC states that O’Brien allegedly accumulated larger stock positions in one or more “winner” accounts at one brokerage firm, while at/or around the same time placing smaller orders in the same securities on the opposite side of the market in one or more “helper” accounts at a different brokerage firm.