Allegations from the Securities and Exchange Commission against Jaspen Capital Partners and its chief executive, Andriy Supranonok, related to a suspected insider trading ring ended in a $30 million settlement.
Supranonok and his company are part of a group of 34 traders and hackers who were charged last month for profiting from the use of sensitive information stolen from corporate press releases before they became public.
The SEC’s lawsuit estimated the amount earned from the criminal actions was more than $100 million.
Computer hackers, who were believed to be in Ukraine, were suspected of accessing the computer servers of major press release websites PRNewswire, Marketwired and Business Wire, a unit of Warren Buffett’s Berkshire Hathaway Inc., over a five-year period.
Last month, U.S. officials confirmed these individuals tapped into more than 150,000 press releases to gain information, such as corporate earnings data, which was then used to predict stock market behaviors and make lucrative trades.
Supranonok and Jaspen Capital, based in Ukraine, reportedly made nearly $25 million through the act of buying and selling contracts-for-difference, or CFDs, which are instruments used to trade certain stocks, The New York Times reported Monday (Sept. 14).
According to the SEC’s complaint, from 2010 to 2014, the CFDs were used to trade stocks based on the information from news releases stolen from two newswire services. This year, additional profits were allegedly made through the use information stolen from an additional newswire service.
“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,” said Andrew J. Ceresney, SEC’s enforcement division director, in a statement, NYT reported.
In August, the FBI arrested Vitaly Korchevsky at his home in Glen Mills, Pennsylvania, and he was later charged in Brooklyn on five counts, including conspiracy to commit securities and money laundering, Bloomberg confirmed.
The hedge fund Korchevsky operated, NTS Capital, is listed as one of the many defendants on the SEC’s lawsuit. Other individuals named in the case are Vladislav Khalupsky, Leonid Momotok and Alexander Garkusha.
According to prosecutors, the suspects involved targeted more than 100 companies and conducted nearly “1,000 inside-the-window trades.”