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32 Who Illegally Profited over $100 Million Charged for Hacking, Insider Trading

Written by FEDagent on .

Participants in an international scheme to hack newswire services in order to trade and profit on nonpublic information about corporate earnings announcements were charged by the Securities and Exchange Commission (SEC) this week.

Fraud charges against 32 defendants, including two Ukrainian ringleaders and 30 others in and outside of the U.S., were unsealed in the District Court of New Jersey on Wednesday.

Participants in the scheme, which has been ongoing since 2010, stole over 150,000 press releases, prior to their public release, from corporate wire services, including Business Wire, PR Newswire, and Marketwired. The stolen information was secretly shared with traders in Russia, Ukraine, Malta, Cyprus, France, and three U.S. states, Georgia, New York, and Pennsylvania, where it was then used to place illicit trades in stocks, options, and other securities.  

“This cyber hacking scheme is one of the most intricate and sophisticated trading rings that we have ever seen, spanning the globe and involving dozens of individuals and entities,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement.  “Our use of innovative analytical tools to find suspicious trading patterns and expose misconduct demonstrates that no trading scheme is beyond our ability to unwind.”

The SEC investigation was conducted by its Enforcement Division, Market Abuse Unit, Complex Financial Instruments Unit, IT Forensics, and Office of International Affairs. Assistance was provided by the U.S. Attorney’s Offices for the District of New Jersey and the Eastern District of New York, the Federal Bureau of Investigation (FBI), the Department of Homeland Security (DHS), the U.S. Secret Service (USSS), the Financial Industry Regulatory Authority, the United Kingdom Financial Conduct Authority, and the Danish Financial Supervisory Authority. 

“This international scheme is unprecedented in terms of the scope of the hacking, the number of traders, the number of securities traded and profits generated,” said SEC Chair Mary Jo White.  “These hackers and traders are charged with reaping more than $100 million in illicit profits by stealing nonpublic information and trading based on that information. That deception ends today as we have exposed their fraudulent scheme and frozen their assets.”

Posted in The Takedown