DOJ: Public Company Officers Plead Guilty to International Securities Fraud Conspiracies

• The schemes involved hacking U.S. brokerage accounts to force purchases of penny stocks controlled by the conspirators.
• Three Canadian co-conspirators previously pleaded guilty to similar charges, and proceeds were divided among the group.

Zoltan Nagy and Glenn Laken admitted to orchestrating pump-and-dump schemes using hacked U.S. online brokerage accounts to force purchases of penny stocks, resulting in over $1 million in losses. The schemes targeted Lotus Bio-Technology Development Corp. and Good Gaming, Inc., with millions of shares sold at inflated prices.

Three Canadian co-conspirators—Phillip Sewell, Richard Tang, and Davies Wong—previously pleaded guilty for their roles. The proceeds from these fraudulent sales were divided among the conspirators, and sentencing hearings for all defendants are scheduled for January 2027. Rahim Mohamed remains at large.

• over $1 million total losses from schemes
• 7.75 million LBTD shares sold in Lotus scheme
• $170,000 proceeds from GMER shares sold

• Review trading activity for Lotus Bio-Technology Development Corp. (LBTD) and Good Gaming, Inc. (GMER) for signs of forced purchases or unusual volume.
• Check customer account security protocols against hacking typologies described in the DOJ report involving forced penny stock purchases.
• Screen for transactions involving Zoltan Nagy, Glenn Laken, Phillip Sewell, Richard Tang, Davies Wong, and Rahim Mohamed in compliance monitoring systems.

This case highlights the risks of sophisticated stock price manipulation schemes that exploit vulnerabilities in online brokerage accounts. Compliance officers must be vigilant for forced trades, unusual share volumes, and account hacking typologies, especially involving penny stocks. The involvement of multiple international actors and the division of proceeds among conspirators underscore the need for robust cross-border cooperation and enhanced monitoring of high-risk securities and accounts. The DOJ’s prosecution signals increased scrutiny and enforcement in this area.