A Ukrainian investment banking firm and its CEO have agreed to pay $30 million to settle SEC charges that they profited from trading on information hacked from newswire services.
Jaspen Capital Partners and Andriy Supranonok were among 34 defendants accused of taking part in a scheme which saw the computer networks of Marketwired, PR Newswire Association, and Business Wire hacked into.
Over five years, tens of thousands of non-public press releases were stolen, with the information used to make trades netting more than $100 million in illegal profits, says the SEC.
The watchdog is continuing to pursue the other 32 defendants, while federal prosecutors have filed indictments against nine people, including Ivan Turchynov and Oleksandr Ieremenko, who are alleged to have carried out the actual hacking.
Jaspen and Supranonok made approximately $25 million buying and selling contracts-for-differences on the basis of hacked press releases stolen from two firms between 2010 and 2014 and then more ill-gotten gains from another newswire service this year, says the SEC.
Without admitting or denying the allegations, Jaspen and Supranonok agreed to be enjoined from violating the antifraud provisions of US securities laws and related SEC antifraud rules and to return $30 million. The offers are subject to approval by the court.
Andrew Ceresney, director, enforcement division, says: "Today's settlement demonstrates that even those beyond our borders who trade on stolen nonpublic information and use complex instruments in an attempt to avoid detection will ultimately be caught."