- Five Russian citizens, four companies facing new SEC claims
- Group said to reap $20 million using stolen press releases
Wall Street’s main regulator sued five more Russian citizens plus four companies for their role in a computer hacking scam that generated $100 million of illicit profits from trading on nonpublic information.
The traders, ranging in age from 28 to 38, used information from yet-to-be-released earnings reports to reap about $20 million in unlawful gains, the U.S. Securities and Exchange Commission said in a statement Thursday. The regulator ordered the assets of the nine new defendants frozen. They haven’t been charged.
The SEC sued 34 traders and hackers in August while prosecutors in Brooklyn, New York, and Newark, New Jersey, indicted nine people. Authorities accused them of infiltrating computer servers of PRNewswire and Business Wire, gaining access to more than 150,000 press releases that included material, non-public information. The hackers had access to the releases over a five-year period and transmitted the stolen data through groups in Ukraine, Malta and Cyprus.
One of the indicted traders, Arkadiy Dubovoy, 51, pleaded guilty Thursday in Newark federal court to conspiracy to commit wire fraud. He faces a sentence of as long as 20 years in prison.
Dubovoy, of Alpharetta, Georgia, admitted that he bought access to stolen press releases from hackers operating out of Ukraine. He said he and others made stock trades based on news contained in the releases and that he agreed to share half his profits with the hackers. He’s the third defendant convicted in the scheme. On Jan. 20, his 29-year-old son, Igor, also pleaded guilty in Newark.
In court papers, prosecutors said evidence collected includes forensic images of hard drives on laptops and computers seized by Ukrainian authorities in November 2012 from two accused hackers, Ivan Turchynov and Oleksandr Ieremenko. They remain at large.
The case is U.S. v. Turchynov, 15-cr-00390, U.S. District Court, District of New Jersey (Newark).