Financial and Business News

This Medical Resident's "Fast Trading" Strategy Just Cost Him Over $500K

Wednesday, 17/12/2025 | 07:51 GMT by Damian Chmiel
  • The spoofing scheme allegedly generated nearly $374,000 in profits through off-hours stock trading using friends’ and relatives’ accounts.
  • In a separate case, an Alabama promoter was ordered to pay an $85,000 civil penalty after claims about a crypto-focused private fund.
SEC US

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.

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.

Topics
Securities and Exchange Commission
sec
About the Author: Damian Chmiel
Damian Chmiel
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Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.

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