The U.S SEC on Tuesday charged two Ukrainian natives, Oleksandr Ieremenko, 26, and Artem Radchenko, 27 as well as eight other stock traders for an alleged insider trading that took place in 2016.
According to a Reuters report, Ieremenko and Radchenko hacked into the SEC’s corporate filing system known as Edgar and made away with “market-moving corporate earnings news” that should not be made public.
The Ukrainian hackers allegedly transmitted the news to stock traders who used the information to generate stock profits up to $4.14 million during that period.
Nature of the Ukranian Hack Attack on SEC Database
The U.S Department of Justice (DOJ) said in the filing that Ieremenko and Radchenko reportedly worked with conspirators who sent fake emails to SEC employees. The emails allowed phishing attacks and planting of malware to be carried out via a Lithuanian server.
The men then got access to confidential information including thousands of “test fillings” and 157 earnings announcement which they subsequently shared with stock traders.
Nature of the Charges
As per the report, a federal court filing shows a 16-count indictment charging Ieremenko and Radchenko for criminal offenses including computer fraud, wire fraud, and conspiracy.
The SEC also filed civil charges against six individuals including two companies in the U.S, Russia, and Ukraine that got a share of the $4.14 million gains from the insider trading activity which lasted between May to October 2016.
If the SEC finds the defendants guilty in court, then they will likely be forced to pay back the illegal gains and also pay fines for their offense.
However, Ieremenko could pay the heaviest penalty since he has links with a similar case in 2015 when market-moving press releases were stolen from publishers and used to generate $100 million in trading profits within 5-½ years.
In recent times, the U.S SEC has focused its cybercrime enforcement actions on Initial Coin Offerings (ICOs) and charged several projects for either being fraudulent or not meeting up with securities laws.
But the latest development is a reminder that cybercrime remains a global problem and is not restricted to the crypto industry.
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