A Pennsylvania day trader pleaded guilty Tuesday to conspiring to commit securities fraud and illegally profiting from a series of coordinated trades involving more than 50 hacked online brokerage accounts.

Joseph P. Willner, 44, of Ambler, PA, pleaded guilty before United States District Judge Margo K. Brodie. He faces up to five years in prison, as well as forfeiture and a fine of up to twice the gross loss caused by the conspiracy.

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“Willner and his co-conspirators used computer hacking to take the pump out of pump and dump, eliminating the need to trick investors into buying artificially inflated stock by simply hacking into brokerage firm accounts and having them buy the stock unbeknownst to the brokerage firms,” said Richard P. Donoghue, United States Attorney for the Eastern District of New York. “While the approach was novel, the end result was all the same, with the defendant being held accountable for his criminal acts.”

Between September 2014 and May 2017, Willner used his brokerage accounts to place “short sale” offers for publicly traded companies’ stock at artificially high market prices, according to the indictment. Simultaneously, Willner’s co-conspirators hacked into victims’ online brokerage accounts and placed buy orders for the stock at the artificially high prices, matching Willner’s short sale offers. Willner and his co-conspirators then re-purchased the stock from the victims’ accounts at market or below-market prices. This sequence of fraudulent trades usually took place within minutes, and Willner immediately profited based on the difference between his artificially high short sale price and the lower price at which he re-purchased the stock.

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As a result of Willner’s and his co-conspirators’ actions, the affected brokerage firms lost over $2 million.

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