New guilty plea, charges in global press release hacking scheme | Reuters - Firstpost
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New guilty plea, charges in global press release hacking scheme | Reuters

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A third trader has entered a guilty plea over what U.S. authorities have called a more than $100 million international scheme to hack into newswires that distribute corporate press releases, and use stolen information to conduct insider trading.

Arkadiy Dubovoy, 51, pleaded guilty on Thursday to one count of conspiracy to commit wire fraud, according to U.S. Attorney Paul Fishman in New Jersey.

Dubovoy, of Alpharetta, Georgia, entered his plea before U.S. District Judge Madeline Cox Arleo in Newark, New Jersey. He faces up to 20 years in prison but will likely get much less under recommended federal sentencing guidelines.

The defendant pleaded guilty a day after the U.S. Securities and Exchange Commission announced civil charges against nine new defendants, in addition to at least 33 it previously charged.

Nine defendants have been criminally charged in Newark or in Brooklyn, New York by the U.S. Department of Justice.

A lawyer for Dubovoy was not immediately available for comment.

Authorities have said the scheme centred on the theft by Ukraine hackers Oleksandr Ieremenko and Ivan Turchynov of more than 150,000 press releases from Business Wire, Marketwired and PR Newswire from February 2010 to August 2015.

Traders, including many with ties to Russia, allegedly gave the hackers "shopping lists" of releases they wanted to see in advance, including quarterly results of public companies.

The traders then made trades based on the press releases' contents in such companies as Caterpillar Inc, Home Depot Co, Las Vegas Sands Corp and Panera Bread Co, authorities have said.

Fishman said Dubovoy admitted in court to buying stolen releases from the hackers, asking two other criminal defendants to decide which trades would be profitable, and agreeing to kick back half of his trading profits to the hackers.

Other traders who have pleaded guilty include Igor Dubovoy, 28, and Alexander Garkusha, 47, both of Alpharetta, which is a suburb of Atlanta.

The new individual defendants in the SEC litigation are Natalia Andreevna Alepko, Andrey Bokarev, Anton Maslov, Radion Panko and Evegenii Zavodchiko. Their companies are located in Belize, Dominica, Panama and the Seychelles, the SEC said.

Business Wire is a unit of Warren Buffett's Berkshire Hathaway Inc; PR Newswire is a unit of UBM Plc being sold to Chicago-based Cision; and Marketwired is being sold to Nasdaq Inc. None was accused of wrongdoing.

The cases in the U.S. District Court, District of New Jersey, are U.S. v. Turchynov et al, No. 15-cr-00390; SEC v. Zavodchiko et al, No. 16-00845; and SEC v. Dubovoy et al, No. 15-06076. The Brooklyn case is U.S. v. Korchevsky et al, U.S. District Court, Eastern District of New York, No. 15-cr-00381.

(Reporting by Jonathan Stempel in New York; Editing by Jonathan Oatis and Chris Reese)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Feb 19, 2016 04:30 IST

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