Two Chinese Nationals Charged with Stock Spoofing Conspiracy
BOSTON – Two Chinese nationals were charged today for their alleged participation in a complex market manipulation conspiracy.
Xiaosong Wang, 31, and Jiali Wang, 41, both of the People’s Republic of China, were charged with one count of conspiracy to commit securities fraud. Jiali Wang was arrested yesterday evening at Logan International Airport as he was boarding a flight to Beijing. Xiaosong Wang was arrested at a home he owns in Upton, Mass. Both defendants will appear in U.S. District Court in Boston today at 3:00 p.m.
According to the criminal complaint, Xiaosong Wang, Jiali Wang, and others conspired and engaged in a coordinated stock manipulation scheme that artificially influenced the prices of publicly traded securities by making others in the market believe that there was trading interest and activity in particular stocks. In reality, no such interest or trading activity existed, and the defendants profited from the price movements they caused.
The alleged scheme targeted “thinly-traded” securities, which are securities with a low trading volume that are volatile and highly responsive to buying/selling activity. The defendants are alleged to have placed (or coordinated the placement of) thousands of non-bona fide purchase/sell orders in order to move stock prices up or down. After the prices moved and the defendants purchased/sold the securities at the artificially higher/lower prices, the initial orders were cancelled. Defendants and their co-conspirators are alleged to have profited millions of dollars as a result of the stock price spoofing scheme.
The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office made the announcement today. Valuable assistance was provided by the Securities and Exchange Commission. Assistant U.S. Attorney Jordi de Llano, Deputy Chief of Lelling’s Securities & Financial Fraud Unit and Assistant U.S. Attorney David D’Addio of Lelling’s Cybercrime Unit are prosecuting the case.
The details contained in charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.