The High Court of Justice has approved of the freezing of nearly £1.1 million in assets (the equivalent of approximately $1.8 million and €1.25 million) after the Financial Services Authority pointed out a source of market manipulation from several entities including Da Vinci Invest Ltd. and Mineworld Ltd. leading to individuals Szabolcs Banya, Tamas Pornye and Gyorgi Brad being suspected.
Foreign government agencies other than the UK ones will be involved in the case as some of these assets due to be confiscated is located in other countries.
The fraudulent manipulation of trading platforms is known as “layering” or “spoofing”.
The manipulation involves utilizing an incredibly fast connection to the Internet which exploits the automated trading used in stock exchanges and other markets in less than a second. The manipulation could include placing orders just to raise and lower prices.
The end result in most cases is that share prices could be changed for the benefit of a particular party.
The freezing of the assets come after the Financial Services Authority revealed that the practice of layering has been in existence since at least 2007 after it had fined Swift Trade £8 million for employing the same illegal practice.
Swift Trade allegedly earned around £1.3 million (as of now Swift Trade is appealing against the FSA’s fine) while UK authorities estimate that the individuals involved have made slightly more than £1 million between July 2011 and August 2010.
Three suspected individuals involved may be living in Switzerland and Hungary.
This time the criminals involved are alleged to have traded across various trading platforms including the London Stock Exchange.
(Cover Photo: PA)