Is it “popular in America -- buying stocks?” an accomplice not named in the indictment asked Shalon at one point.
“It’s like drinking freaking vodka in Russia,” Shalon answered, according to the indictment. “We buy them” -- stocks - - “very cheap, perform machinations, then play with them.”
Dumped Shares
With the price inflated, Shalon, Aaron and the promoters began dumping their shares in coordinated fashion, often generating millions of dollars in profit per stock. Their sales eventually put downward pressure on the stock, and unsuspecting investors suffered big losses, prosecutors said.
The profits, Shalon boasted, were “a small step towards a larger empire.”
In all, Shalon, Aaron and Orenstein manipulated dozens of stocks, prosecutors said. They made more than $2 million in 2012 when they pushed up the price of Mustang Alliances Inc., a purported mining company with operations in Honduras, according to a Securities and Exchange Commission lawsuit filed against the three in July.
By telling investors that the company was “sitting on at least $1.7 billion worth of gold,” the group raised the price of Mustang by 65 percent.
“In a way, it was securities fraud on cybersteroids,” Bharara said.
Credit-Card Challenge
There was more than a fair amount of ingenuity involved.