Insider trading ring netted $100mn by hacking press releases – feds

Federal prosecutors have charged nine people in an insider trading ring that lifted information from corporate press releases before they were made public. The Securities and Exchange Commission said related illegal trading netted more than $100 million.

US prosecutors claimed hacks instigated by nine people – five of whom have already been arrested by the FBI – resulted in rewards of around $30 million. The lawsuit brought by the US Securities and Exchange Commission has alleged that 32 people in and outside the US were involved, raking in more than $100 million in illegal gains. The scheme is the largest known suspected case of hacking that resulted in insider trading.

Beginning in early 2010, hackers invaded networks of press releasedistribution sites Business Wire, MarketWired, and PR Newswire, according to federal authorities.

The contents of corporate press releases, which included valuable market information, were then given to traders who acted on the stolen data, the indictment said. Foreign shell companies were used to distribute the resulting monetary gains.

Federal prosecutors in Brooklyn, New York indicted four men for insider trading in the case, including: Vitaly Korchevsky, a former hedge fund manager from Glen Mills, Pennsylvania; Vladislav Khalupsky, of Brooklyn and Odessa, Ukraine; and Leonid Momotok and Alexander Garkusha of Georgia, Reuters reported.

In New Jersey, a federal indictment charged Ivan Turchynov and Oleksandr Ieremenko, two accused computer hackers from Ukraine; Pavel Dubovoy, a trader from Ukraine; and Arkadiy Dubovoy and his son Igor Dubovoy, traders from Georgia.

The defendants face charges such