SEC Wins $30M from Traders Involved in Hacking Scheme

A Ukrainian national and his company have agreed to pay $30 million to settle with the U.S. government over civil charges of illegally profiting from stolen statements in a case that involved at least two devicemakers.

Last month, the U.S. Securities and Exchange Commission accused more than 30 defendants – individuals and corporate entities, many with Ukrainian ties – of using stolen nonpublic information for illegal profit.

The commission’s complaint alleges that over a five-year period, two hackers broke into the networks of Marketwired, PR Newswire Association and Business Wire to steal press releases detailing companies’ quarterly and annual earnings data before they appeared online (IDDM, Aug. 14). The hackers then sold the releases to traders, including Jaspen Capital Partners and its CEO Andriy Supranonok, who used the information to their financial advantage. Supranonok and Jaspen have now agreed to settle without admitting to allegations in the complaint.

Among the targeted companies were Edwards Life Sciences and San Jose, Calif.-based Align Technology, which markets the Invisalign clear braces system. According to the complaint, the defendants profited from stolen earnings releases from both companies. Assets from those thefts were deposited in accounts frozen by the court.

“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,” says Andrew J. Ceresney, director of the SEC’s Enforcement Division, in a prepared statement.

The SEC filed its complaint in the U.S. District Court for the District of New Jersey. Its litigation against the other defendants remains pending. — Elizabeth Hollis