Possibly Fake Merger Filing Includes Possibly Real Profits

Last year, the Securities and Exchange Commission brought a securities fraud case against a Bulgarian man named Nedko Nedev. The SEC accused Nedev of a pattern of behavior in which he would buy shares of a company's stock, then put out a fake press release or securities filing announcing a takeover of the company. The stock would rally, and Nedev would sell the stock and book a healthy profit of ... well, here is where it gets weird. The SEC said that Nedev did this three times, but by my math he seems to have lost money each time. He bought too early, or sold too late, or both; his alleged manipulations never actually made him a profit.

Of course it is possible that the SEC was wrong, or didn't have the full picture, or just wanted to embarrass Nedev by accusing him, not just of illegally manipulating stocks, but of losing money doing it.