A Ukrainian bank will pay U.S. regulators $30 million for its part in a scheme to hack into business websites to trade on companies’ press releases before they were publicly released.
The Securities and Exchange Commission announced Monday that Jaspen Capital Partners Limited, headquartered in Kieve, and its CEO, Andriy Supranonok, agreed to pay the sum to resolve allegations of the group’s involvement in the scheme, which the SEC said in August included 32 people from around the world.
Altogether, according to the SEC’s case, the group gained $100 million by hacking press releases and trading on non-public information. Jaspen and Supranonok accounted for $25 million of those gains.
“Barely a month after we froze tens of millions of dollars in illegal profits from the defendants’ trading on illegal inside information obtained from hacked news releases, we obtained a settlement with foreign traders that deprives them of their wrongful gains,” said Andrew Ceresney, director of the SEC’s Enforcement Division.
Ceresney and other SEC officials touted the settlement as an example of the agency’s ability to detect fraud based on suspicous patterns in trading and to enforce anti-fraud laws for traders outside the U.S.
The SEC said the settlement is subject to court review, and that neither the company nor its CEO admitted to breaking specific laws as part of the settlement. The agency is still pursuing litigation against 32 defendants.
Two of those are Ukrainian hackers who found a way to hack into two newswire services to gain early access to company press releases. They did not hack the companies themselves.
Those hackers teamed with a group of “unprecedented” size, according to the SEC, to profit from insider information that they sometimes had just minutes before the releases were published.
