US authorities on Tuesday charged a suspected Ukrainian computer hacker and several traders with scheming to trade on market-moving corporate earnings news stolen from a US Securities and Exchange Commission database, Reuters reports.
The charges against 10 defendants, including two charged criminally, relate to a suspected 2016 intrusion into Edgar, the SEC’s corporate filing system used by public companies and money managers, the report said.
Officials believe the scheme resulted in US$4.14 million of illegal trading profit.
Authorities said Oleksandr Ieremenko, 26, and Artem Radchenko, 27, both of Kiev, used a Lithuanian server to hack into Edgar and obtain thousands of “test filings,” including 157 earnings announcements, and shared their findings with traders.
According to the US Justice Department, conspirators sent fake emails to SEC employees that appeared to be from other employees, enabling Ieremenko and Radchenko to steal filings through phishing attacks and by installing malware on SEC computers.
Ieremenko and Radchenko were charged with computer fraud, wire fraud and conspiracy in a 16-count indictment filed with the federal court in Newark, New Jersey.
The SEC filed related civil charges accusing six individuals and two companies in the US, Russia and Ukraine of reaping the US$4.14 million of gains from May to October 2016, with some profits kicked back to Ieremenko.
Two Los Angeles residents, Sungjin Cho and David Kwon, are among the defendants in the SEC case, which seeks to impose fines and recoup illegal gains. Ieremenko was also charged.
SEC Chairman Jay Clayton said the case illustrates the “significant” threats that cyber-crime poses to US markets, including from outside America’s borders, and that his agency is not immune despite efforts to bolster its cyber defenses.
Ieremenko has been at large since being criminally charged in 2015 over the theft of more than 150,000 corporate press releases from Business Wire, Marketwired and PR Newswire.
More than 40 defendants were criminally or civilly charged in that scheme, which US authorities said generated more than US$100 million of trading profit over five-and-a-half years.
According to the SEC, Ieremenko turned his attention to Edgar after the newswire scheme ended.
– Contact us at [email protected]