A Canadian man who bragged about making up to $50 million a month by running an international stock manipulation scheme using a practice known as layering was charged on Tuesday, prosecutors said.

U.S. Attorney Paul Fishman said it was the first federal securities fraud prosecution of someone accused of using the high-frequency trading strategy.

Aleksandr Milrud, of Ontario and Aventura, Fla., was arrested at his Florida residence on Tuesday. He faces counts of wire fraud and securities fraud conspiracy. The wire fraud count carries a maximum sentence of 20 years upon conviction, while the conspiracy fraud carries a five-year maximum sentence.

Milrud, 50, was detained pending a bail hearing Friday and couldn't be reached for comment by telephone. He has not retained a lawyer.

"The defendant and his far-flung network of conspirators operated an international scheme in which they generated millions of dollars in illicit profits for themselves with artificial trade orders executed at high speeds," Fishman said in a statement released by the FBI. 

Milrud recruited stock traders in China and Korea to place high-speed buy or sell orders and then quickly cancel them, known as layering or spoofing, the U.S. attorney's office said. The activity would artificially raise or lower the stock prices and allow traders to exploit the price moves to make profits on trades.

High-speed traders use computers to sift through price changes and data and news feeds to buy and sell stocks in fractions of a second. They've come under scrutiny by regulators as their influence over the market has grown. More than half of stock trading every day is done by high-speed trading firms.

Milrud bragged to an informant that the scheme yielded as much as $600,000 in a day and generated between $1 million and $50 million per month, authorities said. The informant, who owned an off-shore broker-dealer, recorded Milrud on several occasions describing his trading strategies in detail, they said.

"The losses to investors due to this innovative fraud could be in the millions," said Aaron Ford, special agent in charge of the FBI's Newark office. 

Ford said in a statement that Milrud was behind a "sophisticated, international, groundbreaking market manipulation scheme that utilized an illicit, high-speed trading strategy to execute trades."

The FBI will continue to seek out and investigate "frauds such as this one in order to ensure a level playing field for all investors," Ford said in the statement. 

With a file from CBC News