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by Mike Caswell

The U.S. Securities and Exchange Commission has won a permanent injunction and a $285,000 disgorgement order against Aleksandr Milrud, an Ontario man who ran a manipulation scheme using high-speed trading software. (All figures are in U.S. dollars.) The SEC claimed that Mr. Milrud used the software to manipulate high-volume stocks by pennies. He was able to generate gains from small price variations that he created.

The sanctions for Mr. Milrud, 57, are contained in a judgment that the SEC released on Wednesday, Jan. 26. The penalties are limited to the injunction, which bars future violations, as well as the $285,000 disgorgement order. The SEC has not imposed a fine, although Mr. Milrud did spend some time in custody while awaiting trial on related criminal charges, serving one month in jail and eight months of 24-hour house arrest. He ultimately pleaded guilty in that case, and received five years of probation along with a $10,000 fine.

The penalties come about seven years after the SEC first charged Mr. Milrud, filing a complaint on Jan. 13, 2015, in the District of New Jersey. The case stemmed from a form of high-speed trading that the SEC referred to as "layering." Mr. Milrud employed traders in Korea and China 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.

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