Two defendants agreed to pay $30 million to settle U.S. Securities and Exchange Commission civil insider trading charges over a scheme to hack into networks that distribute corporate news releases, the regulator said on Monday.
Jaspen Capital Partners Ltd and Chief Executive Andriy Supranonok, both from Kiev, Ukraine, are the first of 34 defendants to settle SEC charges over allegations of the theft of more than 150,000 press releases from Business Wire, Marketwired and PR Newswire before the news became public.
The SEC said the scheme resulted in more than $100 million of illegal profit over a roughly five-year period.
Authorities said traders would give hackers “shopping lists” of press releases they wanted to see in advance, and then make trades based on them. Nine of the defendants also face criminal charges. Jaspen and Supranonok were not criminally charged.
Without admitting wrongdoing, the defendants agreed to transfer $30 million of ill-gotten gains from frozen brokerage accounts, the SEC said. The accord requires court approval.
“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,” SEC enforcement chief Andrew Ceresney said in a statement.
