Back in September 2017, LeapRate reported that the Securities and Exchange Commission (SEC)’ EDGAR system data has been hacked. Some individuals have extracted a nonpublic information to use for illegal trading, or as SEC Chairman Jay Clayton issued in his statement back then – the data may have been used for “illicit gain through trading”.
The Commission has informed that it has now pressed charges against nine individuals – a Ukrainian hacker, six individual traders in California, Ukraine, and Russia, and two entities.
The Commission’s complaint alleges that the Ukrainian hacker Oleksandr Ieremenko has gained access to EDGAR system data back using deceptive techniques back in 2016, giving later the information to several traders, who generated at least $4.1 million in illegal profits through trading.
The names of the traders received and traded on the basis of the hacked EDGAR information can be seen below:
- Sungjin Cho, Los Angeles, California
- David Kwon, Los Angeles, California
- Igor Sabodakha, Ukraine
- Victoria Vorochek, Ukraine
- Ivan Olefir, Ukraine
- Andrey Sarafanov, Russia
- Capyield Systems, Ltd. (owned by Olefir)
- Spirit Trade Ltd.
International computer hacking schemes like the one we charged today pose an ever-present risk to organizations that possess valuable information,” commented Enforcement Division Co-Director Stephanie Avakian. “Today’s action shows the SEC’s commitment and ability to unravel these schemes and identify the perpetrators even when they operate from outside our borders.
The trader defendants charged today are alleged to have taken multiple steps to conceal their fraud, including using an offshore entity and nominee accounts to place trades,” said Enforcement Division Co-Director Steven Peikin. “Our staff’s sophisticated analysis of the defendants’ trading exposed the common element behind their success, providing overwhelming evidence that each of them traded based on information hacked from EDGAR.