U.S.
securities regulators have brought one new case and wrapped up another
involving alleged market manipulation and offering fraud, targeting a
California stock trader and an Alabama private fund manager in actions that
touch both traditional equities and crypto-focused investments.
The Securities
and Exchange Commission (SEC)
filed settled charges against 41-year-old Artur Khachatryan, a resident of California,
alleging he ran a two-year spoofing scheme that generated almost $374,000 in
profits by manipulating prices in thinly traded stocks outside normal market
hours.
California Trader Accused
Of Off-Hours Spoofing
According
to the complaint in the Central District of California, Khachatryan allegedly
flooded the market before and after the regular trading session with visible
limit orders he did not intend to execute, narrowing the bid-ask spread and
pushing prices in a direction he chose.
He then
placed real orders on the other side of the market at prices that benefited
from the move, and quickly canceled the spoof orders, repeating the pattern to
profit from both upward and downward price swings.
The SEC
alleges Khachatryan used this approach in his own brokerage accounts and in
accounts of friends and family, including ones opened in the names of two
relatives after earlier accounts were restricted or closed by multiple
brokerages concerned about “quote manipulation” and “manipulating activities.”
In one
example cited in the complaint, he allegedly widened and then compressed the
spread of a U.S.-listed company’s stock in the early-morning session, shorting
at prices above 208 dollars per share and then buying back below that level
minutes later.
The pattern echoes a recent SEC
case involving a Russian citizen accused of using fake identities to
open dozens of trading accounts and manipulate stock prices across hundreds of
brokerage accounts.
Khachatryan has agreed, without admitting or denying the allegations, to permanent injunctive relief, disgorgement of $373,885, prejudgment interest of $22,629.34 and a civil penalty of $112,165, as well as a four-year restriction on opening or trading in brokerage accounts without notifying firms of the judgment.
Alabama Promoter Hit With
Penalty Over Apex Fund
In a
separate case, the SEC said it obtained a final judgment imposing an $85,000 civil
penalty on Alabama resident James O. Ward, Jr. in an offering fraud action tied
to Apex Financial Institute, a private investment fund he co-founded.
Ward raised
at least $852,000 worth of crypto assets from about 70 investors between March
and September 2021 by selling what the SEC describes as fund interests in Apex,
which was formed in the British Virgin Islands.
The
complaint, filed in the Southern District of Alabama in 2024, alleges Ward told
prospective investors that Apex was regulated by the SEC, had 25 million
dollars in assets under management, had completed a 12-month beta test of its
trading strategies, could deliver “substantial gains without any risk of loss,”
and maintained offices in Dubai, Cyprus and Sweden.
In reality,
according to the SEC, Apex had no assets under management before taking in
investor funds, did not exist in 2020 and ran operations from the homes of its
three principals, while a touted Apex Financial Token “pegged” one-for-one to
the U.S. dollar never actually existed.
The
fabricated credentials and false performance claims mirror tactics seen in a
recent Discord-based fraud where a 26-year-old allegedly lured more than 40 investors with
fake fund performance and spent their money on luxury items.
After the
SEC moved for remedies, the court ordered Ward to pay an $85,000 civil penalty
in October 2025, the agency said. Apex itself has been defunct since 2022 and
currently has no assets, according to the complaint; Ward’s two partners used
personal funds in an effort to repay investors as the business was wound down.
This article was written by Damian Chmiel at www.financemagnates.com.
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