WASHINGTON, D.C. — The U.S Securities and Exchange Commission (SEC) is charging a Ukrainian hacker, six traders and others with hacking into Electronic, Data Gathering, Analysis and Retrieval (EDGAR) system to obtain information used for illegal trading.
According to the SEC, Ukrainian hacker Oleksandr Leremenko gained access to the SEC's EDGAR files that contained "nonpublic earnings" information and then used the information to earn at least $4.1 million in illegal profits from trading. The SEC is also accusing Leremenko, six traders in California, Ukraine, Russia and two entities with hacking into newswire services to trade on nonpublic information.
“International computer hacking schemes like the one we charged pose an ever-present risk to organizations that possess valuable information,” SEC Enforcement Division co-director Stephanie Avakian said in a statement. “[This] 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 are alleged to have taken multiple steps to conceal their fraud, including using an offshore entity and nominee accounts to place trades,” added SEC 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.”
The defendants have been charged with federal securities antifraud laws and SEC antifraud rules, according to the SEC.