Ukrainian CFD insider trading defendants agree to $30M settlement with the SEC – is more coming?

We had reported back in August that the US Securities and Exchange Commission (SEC) had charged 32 defendants for taking part in a scheme to profit from stolen nonpublic information about corporate earnings announcements.

Those charged include two Ukrainian men, Ivan Turchynov and Oleksandr Ieremenko, who allegedly hacked into newswire services to obtain the information and 30 other defendants in and outside the U.S. who allegedly traded on it, generating more than $100 million in illegal profits.

We were skeptical at the time that US authorities would ever ‘get’ those involved, or recover any of the supposedly ill-gotten gains.

Jaspen Capital PartnersWell, we were wrong. At least in part.

While the SEC has not yet gotten to Turchynov and Ieremenko, it has announced that is has obtained a $30 million settlement with one of the traders who benefited from the information – Jaspen Capital Partners Limited and its CEO Andriy Supranonok, also based in the Ukraine.

According to the SEC, Jaspen and Supranonok made approximately $25 million buying and selling CFDs on the basis of hacked press releases stolen from two newswire services between 2010 and 2014, and made additional profits trading on press releases stolen from a third newswire service in 2015.

Andrew J. Ceresney, Director of the SEC’s Enforcement Division, stated:

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.

The SEC still has $70 million more of ill-gotten gains to go after in this case. However US authorities’ ability to effect measures such as asset freezes makes for a formidable tool in extracting settlements where both the defendants and the amount of fraud are known.

To see the SEC announcement on the settlement with Jaspen Capital Partners and Andriy Supranonok click here.

Read Also: