The Securities and Exchange Commission (SEC) filed charges against 32 people involved in an international hacking scheme to profit from stolen nonpublic information particularly corporate earnings announcements not yet released to the public.

According to the SEC, the 32 defendants included two Ukrainian hackers, who allegedly accessed the computer systems of newswires and stole not-yet-released press releases about the earnings of numerous publicly-traded companies.

SEC Charges 32 People Involved In International Hacking Scheme

SEC allegations

According to the Commission, the defendants made more than $100 million in profits after trading the stocks of the companies using the stolen material nonpublic information.

The SEC alleged that Ukrainian hackers Ivan Turchynov and Oleksandr Ieremenko spearheaded the scheme and used advanced techniques to hack the computer systems of the news wires. They created a secret web-based location to send the stolen data to traders in Cyprus, France, Malta, Russia, Ukraine, and three U.S. states (Georgia, New York, and Pennsylvania).

According to the SEC, the traders had only a short window of opportunity to place illicit trades in the stocks, options, and other securities using the stolen nonpublic information. The traders allegedly transferred a portion of their illegal profits to the Ukrainian hackers.

The SEC found that the Ukrainian hackers hid the intrusions by using proxy servers. They also concealed their identities by pretending as employees and customers of the news wires.

The Ukrainian hackers recruited traders in their scheme using a video highlighting their ability to steal corporate earnings reports prior to its release to the public.

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Unprecedented international fraudulent scheme

In a statement, SEC Chairman Mary Jo White said, “This international scheme is unprecedented in terms of the scope of the hacking, the number of traders, the number of securities traded and profits generated.” Ms. White emphasized that the Commission exposed and froze the assets of the defendants and ended their deception.

On the other hand, the Commission’s Head of Enforcement Division, Andrew Ceresney said, “This cyber hacking scheme is one of the most intricate and sophisticated trading rings that we have ever seen, spanning the globe and involving dozens of individuals and entities.”

According to Ceresney, SEC uses innovative and analytical tools to determine suspicious trading patterns and expose misconduct. He said, “No trading scheme is beyond our ability to unwind.”

The U.S. Attorney’s Office for the District of New Jersey and Eastern District of New York also filed parallel criminal charges against the 32 defendants in the SEC action.

This was a pretty sophisticated hack see the full document below.

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