The Securities and Exchange Commission has charged 18 individuals and entities for their alleged roles in the hacking of dozens of online retail brokerage accounts.

The SEC alleges that at least 31 retail brokerage accounts were used to purchase microcap stocks to manipulate the price and trading volume of those stocks. The SEC didn’t identify the brokerages or accounts that were hacked.

“This case illustrates the critical importance of cybersecurity and of our ongoing efforts to protect retail investors from cyber fraud,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement.

“The SEC remains committed to rooting out this type of wrongdoing. Investors should also take precautions, including choosing strong passwords, using different passwords for different accounts, and using two-factor authentication when available,” he added.

Those charged include Rahim Mohamed of Alberta, Canada, who is alleged to have coordinated the hacking attacks, and several others in and outside the U.S. who allegedly benefited from or participated in the scheme, according to the SEC.

According to the SEC, Mohamed is the 100% owner of Nexium Financial, the chief executive officer and chairman of Softlab9 Technologies, and “controls or controlled” a brokerage firm in the Cayman Islands called White Sands Securities SEZC.

The SEC alleges that in late 2017 and early 2018, hackers accessed the 31 U.S. retail brokerage accounts to purchase the securities of Lotus Bio-Technology Development and Good Gaming.

The purchases allegedly enabled fraudsters, who already controlled large blocks of Lotus Bio-Tech and Good Gaming stock, to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds.

The SEC alleges that Davies Wong of British Columbia, Canada, and Glenn Laken of Chicago, controlled the majority of the Lotus Bio-Tech and Good Gaming stock, respectively, that was sold while the hacking attacks were being carried out.

Mohamed allegedly coordinated with Wong, Laken, and others to orchestrate the attacks. The SEC also alleges that Richard Tang of British Columbia, Canada, was involved with both the Lotus Bio-Tech and Good Gaming schemes.

“Our complaint details a brazen and sophisticated scheme, with hackers using international accounts and dummy accountholders to hide their tracks,” Nekia Hackworth Jones, director of the SEC’s Atlanta Regional Office, said in a statement. “As this case demonstrates, the Division can uncover misconduct even when it crosses borders and is concealed behind multiple layers of obfuscation.”

The SEC’s complaint includes charges violations of the antifraud and beneficial ownership reporting provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The SEC is seeking the return of ill-gotten gains plus interest, penalties, bars, and other equitable relief. The SEC’s investigation is continuing.

Apart from Mohamed, Wong, Laken and Tang, the SEC listed the following as defendants and provided details about them:

  • Zoltan Nagy, a Canadian citizen who resides near Vancouver, British Columbia, Canada and has ties to Point Roberts, Washington
  • Jeffrey Cox, a Canadian citizen who resides in Calgary, Alberta
  • Phillip Sewell, a British citizen who resides in Vancouver, British Columbia, Canada
  • Breanne Wong, a Canadian citizen who resides in Panama and Vancouver, British Columbia, Canada
  • Christophe Merani, a resident of Glendale Heights, Illinois
  • Anna Tang, a Canadian citizen who resides in Richmond, British Columbia, Canada
  • Robert Seeley, a British citizen who resides in the Dominican Republic
  • Richard Smith, a British citizen who resides in the Dominican Republic
  • Christopher Smith, a British citizen who resides in the Dominican Republic
  • H.E. Capital, a privately held Nevis entity that was incorporated on Sept. 26, 2000, and is based in the Dominican Republic.
  • POP Holdings, a privately held Nevis entity that was incorporated on Jan. 3, 2007, and is based in the Dominican Republic
  • Maximum Ventures Holdings, a privately held Wyoming entity that was organized on April 13, 2015
  • Harmony Ridge, a privately held Nevada entity that was originally incorporated on April 30, 2015, and then reincorporated in Wyoming on March 12, 2019.
  • Avatele Group, a privately held Wyoming limited liability company that was organized on March 11, 2015.