SEC charge group behind the Hack file system, $ 4.1 million in illegal operations




SEC Edgar Hack
The SEC has demolished an insider trading group that hacked into its EDGAR file system. | Source: Shutterstock

New charges emerged from a 2015 piracy and insider case, the SEC announced today. In the previous case, Ivan Turchynov and Oleksandr Ieremenko pirated the news services and provided information to the merchants before anyone else could obtain it. The scheme was very profitable. In one incident, a merchant who used information obtained by more than $ 2 million by shorting an action that was to receive bad news the next day, Dendreon Pharmaceuticals.

From Newswires to government databases

A total of 32 people fell in the case of news fraud. The majority quoted in the information. But now the SEC is charging that the individuals went further than previously announced. From a press release this morning:

Ukrainian hacker Oleksandr Ieremenko turned his attention to EDGAR and, using deceptive piracy techniques, gained access in 2016. Ieremenko extracted EDGAR files that contained non-public profit results. The information was pbaded on to people who used it to exchange the narrow window between the filing date of the SEC filing systems and the time the companies published the information to the public. In total, merchants traded before at least 157 profit launches from May to October 2016 and generated at least $ 4.1 million in illegal profits.

EDGAR means "Electronic data collection, badysis and recovery" system. Most public companies doing business in the US UU They use EDGAR to file information with the SEC. Information that can be very useful for traders, such as bad quarters or other potentially damaging information, as well as positive information. Above all, merchants understand that the market responds to the performance of the company. Citigroup's stock declined by almost $ 20 over the course of 2018 after recording a large loss at the end of 2017.

Source: SEC

Six traders loaded

Steven Peikin, co-director of the SEC's Compliance Division, said:

It is alleged that the defendants by the accused merchants today have taken several measures to conceal their fraud, including the use of an offshore entity and nominal accounts to conduct transactions.

In addition, the SEC seems ready to demonstrate that Ieremenko developed a deep understanding of EDGAR. He was able to identify non-public records, including the unpublished results statements. He pbaded the information to at least six merchants loaded next to him. Two accused merchants are residents of the United States: Sungjin Cho and David Kwon, both from Los Angeles.

In addition, two companies called Spirit Trade and Capyield Systems are also mentioned in the indictment. It is important to note that the 9 entities face civil fines and a ban on trade for life. Some of them also face criminal charges from the United States Attorney's Office for the District of New Jersey. That office has yet to publish a press release on the subject of charges. The actions of Oleksandr Ieremenko are definitely framed in the Law of Computer Fraud and Abuse. One of the oldest anti-piracy laws in the United States, at a minimum, penalizes access to computer systems without authorization.

Featured image of Shutterstock.


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