by Mike Caswell
The U.S. Securities and Exchange Commission has revoked now-defunct Toronto brokerage Biremis Corp. and fined its two principals, Peter Beck and Charles Kim, over manipulative trading that was designed to trick algorithmic traders. The SEC claimed that the firm failed to stop daytraders from using a manipulative practice called layering, which involved entering and cancelling multiple orders. Sanctions include a combined $500,000 in fines. (All figures are in U.S. dollars.)
The penalties are contained in an administrative order entered on Tuesday, Dec. 18. The order identifies Biremis as a Toronto firm affiliated with Swift Trade Inc. that had up to 5,000 daytraders in over 30 countries. Mr. Beck, 57, was the firm's co-founder and president, and Mr. Kim, 40, was a co-founder and vice-president.
The SEC claims that overseas daytraders using Biremis's platforms routinely used a practice called layering, in which they entered large numbers of orders that they did not intend to complete. The purpose of the orders was to trick other market participants, often those using algorithmic trades, into buying or selling a stock. Biremis generally collected 17 per cent of the profits that the traders made, the SEC says.
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