Posted on 02/18/2004 1:05:58 PM PST by antaresequity
Seattle man sued in alleged day-trading scheme
By Maureen O'Hagan
Seattle Times staff reporter
A Seattle man has been sued by the Securities and Exchange Commission (SEC) for allegedly using stolen identities to open day-trading accounts and using those accounts to make a profit for himself.
The man, a day-trader named Suheil M. Judeh, allegedly made $95,000 in seven months using the phony accounts. SEC officials believe the case is the first of its kind for the agency.
"We do think the identity-theft angle is quite novel," said Pauline Calande, assistant administrator of the agency's Pacific region.
A criminal investigation is also under way, she said.
According to the complaint, filed today in U.S. District Court in Seattle, Judeh either created or stole identities of 26 individuals and opened brokerage accounts in their names using forged checks written on nonexistent accounts.
He then made trades between his own account and the phony accounts, always making sure his own account got the profitable end of the trade, the complaint says. He frequently bought and sold the same stock within minutes at prices differing by 10 percent or more, according to the complaint.
For example, SEC officials said, he might buy a stock from the fraudulent account, then sell it back to that same account at a higher price. He was able to buy and sell directly from one account to the other because he conducted much of his business after hours, when the volume of trading activity was low, the complaint said. That way, the complaint contends, his "sell" order could be matched with the phony account's "buy" order.
"The account in his name is essentially buying low and selling high," said Tom Eme, the SEC attorney handling the case. "He wasn't stuck with losses in the (phony) accounts because he opened them with forged checks."
Judeh's after-hours trading often comprised a substantial portion of the volume at the time — which could have made the stock look more valuable than it was by leading other traders to believe "the activity was driven by genuine demand and supply for the stocks involved," the lawsuit said. "What they actually witnessed, however, was fraudulent trading at contrived prices that had no relation to the true market."
The individuals whose identities were stolen did not lose money in the trades, the SEC said. Rather, brokerage firms incurred the losses when they could not cash the worthless checks.
Judeh was sued last October by Ameritrade, a discount brokerage service, for using a similar method. According to that complaint, Judeh opened several accounts with forged checks and left other accounts with debit balances. Ameritrade said in the complaint that he owed the company $38,000 as a result.
The company said it discovered Judeh's trades by tracing phone calls back to him. That lawsuit was dismissed in November.
Judeh's phone number is unlisted and he could not be reached for comment.
Maureen O'Hagan: 206-464-2562 or mohagan@seattletimes.com
Copyright © 2004 The Seattle Times Company
Were his profits going to support jihad?
Now how did he ever get this to happen ??????? Where'd the money come from if the checks were totally bogus and where did he get the checks from to write a check ???
This is really bizarre.
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