A Ukrainian company and its chief executive will pay $30 million to settle charges in a $100 million securities case that U.S. authorities describe as the largest ever involving a sophisticated cybercrime operation.
Jaspen Capital Partners Limited and chief executive Andriy Supranonok agreed to pay back "ill-gotten gains" they allegedly accrued from 2010 to 2015 through profitable trades they made using information they stole from corporate press releases through a computer hacking network based in Ukraine, the U.S. Securities and Exchange Commission (SEC) said on September 14.
The accused neither acknowledged nor denied wrongdoing, but they did agree to refrain from future violations of the securities laws as part of the settlement.
The Ukrainian firm was involved in what U.S. authorities say was the biggest insider -trading scheme to date involving a sophisticated cybercrime network operated out of Kyiv.
"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," said SEC director of enforcement Andrew Ceresney.
In a 21st-century twist on insider trading, officials say that two Ukrainian hackers allegedly broke into the computers of PR Newswire and other leading financial news services and stole some 150,000 corporate press announcements before they were released to the public.
The hackers then sold quarterly earnings figures and other sensitive, potentially market-moving information they culled from the press releases to dozens of investors, who netted more than $100 million trading on it.
Supranonok, 33, resides in Kyiv and holds 30 percent of Jaspen, which "purports" to be "a full service investment bank," the SEC said in its complaint.
The parties are the first to settle since U.S. authorities announced the case in August.
Litigation is continuing against the remaining 32 defendants in the case, the SEC said.
In a parallel criminal case, the U.S. Justice Department also has indicted nine of the same defendants from the United States and Ukraine on criminal charges -- including securities fraud, computer fraud and conspiracy -- in courts in New Jersey and Brooklyn, New York.
