Two defendants who were charged with hacking news service press releases and using the information to make millions have agreed to pay $30 million to settle the charges, the Securities and Exchange Commission announced Monday.
Ukrainian-based Jaspen Capital Partners Limited and its CEO Andriy Supranonok have agreed to the settlement of charges, without admitting or denying guilt, that they profited from trading on non-public corporate information hacked from newswire services.
The two fed the information to at least 32 other international traders who used the information before it became public knowledge, the SEC says.
By getting an early look at the information before its public release, the traders allegedly generated more than $100 million of illegal profits over a five-year period between 2010 to 2015, the SEC says. The case was filed in U.S. District Court for the District of New Jersey, which entered an asset freeze and other emergency relief against Jaspen and Supranonok, among others, in August.
“Barely a month after we froze tens of millions of dollars in illegal profits from the defendants' trading on illegal inside information obtained from hacked news releases, we obtained a settlement with foreign traders that deprives them of their wrongful gains,” says Andrew J. Ceresney, director of the SEC's Enforcement Division. “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.”
According to the SEC’s complaint, Jaspen and Supranonok made approximately $25 million buying and selling contracts for differences 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. Contracts for differences are derivatives that allow traders to place highly leveraged bets on the direction of a stock’s price movement.
The SEC’s litigation continues against the remaining 32 defendants charged in the case.