The Securities and Exchange Commission has leveled a $30 million sanction against Jaspen Capital Partners Ltd. And its Chief Exec Andriy Supranonok, from Kiev and the Ukraine. Both have agree to pay the fine to settle U.S. Securities and Exchange Commission civil insider trading charges over a scheme to hack into networks that distribute corporate news releases, the regulator said on Monday.
The two are also the first of 34 defendants to settle SEC charges over allegations of the theft of more than 150,000 press releases from Business Wire, Marketwired and PR Newswire before the news became public. The SEC said the operation resulted in more than $100 million of illegal profit over a roughly five-year period.
Traders gave hackers “shopping lists” of press releases they wanted to see in advance, and then make trades based on them. Nine of the defendants also face criminal charges.
The SEC said Jaspen and Supranonok used contracts-for-differences, which are derivatives allowing for leveraged stock price bets, to trade from 2010 to 2015 in Panera Bread Co, RadioShack Corp and other companies based on press releases stolen from the three newswires.
“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,” SEC enforcement chief Andrew Ceresney said in a statement.
Jeffrey Newman represents whistleblowers