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by Mike Caswell

Ontario resident Aleksandr Milrud has pleaded guilty to criminal fraud charges in the United States stemming from a multimillion-dollar manipulation scheme. Prosecutors claimed that Mr. Milrud, 50, masterminded a "layering" operation in which he manipulated high-volume stocks by pennies. He was able to generate massive profits from small price variations.

Mr. Milrud entered the plea in an appearance before a New Jersey judge on Sept. 14, 2015. He pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of five years in jail. Coincident with the guilty plea, the judge allowed Mr. Milrud to return to his residence in Canada, where he may remain until his sentencing. If he does not appear for his sentencing, his plea agreement includes a term specifying that the government may reinstate a wire fraud charge that it dropped as part of the deal.

The case against Mr. Milrud stemmed from a form of high-speed trading. According to prosecutors, he employed traders in Asia who used specialized software to rapidly place orders they never planned to execute. The only purpose of the orders was to influence the price of a stock. As the market reacted, the traders were able to rapidly profit from small price fluctuations. It is not clear how much money the scheme generated, but Mr. Milrud allegedly told a broker it could generate $1-million every month. (All figures are in U.S. dollars.)

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