A Cyprus-based company accused of manipulating stocks on U.S. exchanges via compromised trading accounts denied the allegations on Friday, placing blame on "Russian swindlers."


A U.S. federal judge in New York agreed to freeze the assets of BroCo Investments on Tuesday, after the U.S. Securities and Exchange Commission filed a complaint alleging that BroCo and its president, Valery Maltsev, made more than $255,500 by placing unauthorized trades on the Nasdaq and New York Stock Exchange through the compromised investor accounts.

BroCo says a Genesis Securities account under investigation for having made legitimate trades in coordination with those made via the compromised accounts was opened on behalf of a client.

"The equivocal account belongs to our client," Dmitry Zelenko, head of BroCo's legal department, said in a statement. "This client has been conducting his trading on his own, and BroCo [has] just provided him with technical facilities and brokerage services in cooperation with licensed Genesis Securities. This account was identified as belonging to BroCo by a mistake."


Zelenko did not identify the client, saying that disclosure could compromise the investigation. "Russian swindlers have used the company's brokerage services for manipulations at NYSE," according to the statement, which added that the company is cooperating with the SEC to clear up what it said were misunderstandings. Russian and U.S. law enforcement agencies are involved, it said.

BroCo intends to cooperate with criminal proceedings against those allegedly involved in stealing usernames and passwords of accounts, then, among other actions, buying securities via the compromised accounts at inflated prices, BroCo President Maltsev said. By doing this, the company intends to help victims recover an alleged total of $600,000 in damages and to clear its reputation in the U.S. court.


Asked for comment on BroCo's statement, Justin Chretien, assistant chief litigation counsel at the SEC, said in an e-mail: "While we have no comment on the ultimate resolution of this case, we appreciate that BroCo Investments has been fully cooperative with the SEC. We both look forward to a speedy resolution."
source: cnet.com

Vodafone has discovered that malware found on several HTC Magic phones it distributed came from the memory cards, which were shipped in about 3,000 HTC and other phones, according to a published report.

Spanish language blog Movil Zona reported that Vodafone said it was immediately sending new memory cards to people who bought phones using those cards.

After malware related to the Mariposa botnet was discovered on a second HTC Magic phone from Vodafone this week, a Vodafone spokesperson issued a statement to CNET on Thursday saying it was a "local incident in Spain."

In response to questions about the latest report, the spokesperson provided an e-mail statement on Friday that said: "Vodafone Spain has identified customers that could potentially be affected by the incident and Vodafone Spain will be sending these customers a new memory card. Additionally, Vodafone Spain will provide these customers with tools to verify and fix the integrity of their devices."