Alleged hacker and traders charged in U.S. insider trading scheme

U.S. authorities have charged an alleged hacker and a group of traders in connection with efforts to hack into the U.S. database of regulatory filings as part of an illegal insider trading scheme.

The U.S. Securities and Exchange Commission (SEC) announced today that a Ukrainian hacker, six traders in California, Ukraine, and Russia, and two companies, were charged for their alleged participation in a scheme to hack into the SEC’s regulatory filing system, known as EDGAR, to uncover non-public information. The SEC says the hacker and some of the traders were involved in a similar scheme to hack into newswires to unearth company information before it is released to the public.

The SEC’s complaint alleges that Oleksandr Ieremenko hacked into its EDGAR database in 2016 and obtained earnings information that had yet to be released. The information was passed along to a group of traders who allegedly traded ahead of at least 157 earnings releases, generating at least US$4.1 million in illegal profits. The allegations have not been proven.

“International computer hacking schemes like the one we charged today pose an ever-present risk to organizations that possess valuable information,” said Stephanie Avakian, co-director of the SEC’s enforcement division. “Today’s action shows the SEC’s commitment and ability to unravel these schemes and identify the perpetrators even when they operate from outside our borders.”

At the same time, the SEC notes that the U.S. Attorney’s Office for the District of New Jersey announced related criminal charges today.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.