U.S. authorities charged a hacker residing in Ukraine and several others on Tuesday (Jan. 15) with trading on non-public corporate earnings information they got by hacking the U.S. Securities and Exchange Commission’s EDGAR database.
According to a report in Reuters citing a 16-count indictment filed with the U.S. District Court in Newark, New Jersey, the Ukrainian computer hacker, Oleksandr Ieremenko, 27, of Kiev, and others working with him were charged with hacking an SEC database, getting their hands on thousands of “test filings” that included around 157 earnings announcements. The accused hacked into the SEC’s EDGAR database via a Lithuanian server and shared the information with a group of traders, reported Reuters.
The report noted the SEC said the trader group was made up of eight individuals and companies in the U.S., Russia, and Ukraine. The group made $4.1 million in ill-gotten gains from the scam. They traded on the information from May through October of 2016, said the report. In addition to Ieremenko, the U.S. Department of Justice charged Artem Radchenko, a Ukrainian resident accused of recruiting the traders, with computer fraud, wire fraud and other crimes. The SEC has filed civil charges against the defendants, noted Reuters.
Citing court papers, Reuters reported the hacker Ieremenko has been at large since he was charged back in 2015 with stealing more than 150,000 non-public corporate press releases from Business Wire, Marketwired and PR Newswire, the distributors of those documents.
Back in September of 2017, the SEC revealed the EDGAR database was hacked, saying that hackers broke in during August to make illegal trades off the information they gleaned. That raised concerns and criticism about the cybersecurity practices of the government agency. It also came at a time when the SEC had named cybersecurity as a top focus of enforcement, dealing it an embarrassing blow when its own network could be hacked. At the time the SEC had no idea who was behind the hack, but with this week’s indictments, it appears to have uncovered the culprits.