Two indictments were unsealed today in federal court in New Jersey and
Brooklyn charging nine individuals with having participated in a unique
scheme to profit illegally from stolen insider information. Many of the
defendants have connections to the Ukraine, and their names are Vitaly
Korchevsky, Vladislav Khalupsky, Leonid Momotok, Alexander Garkusha (Brooklyn)
and Ivan Turchynov, Oleksander Ieremenko, Arkadiy Dubovoy, Igor Dubovoy,
and Pavel Dubovoy (New Jersey).
In short, it is alleged that this conspiracy included skillful computer
hackers and securities traders working together to steal valuable information
and then use it to their advantage. More specifically, the alleged computer
hackers used brute force attacks and a variety of other computer hacking
techniques (such as SQL injections) to access confidential press releases
containing financial data for publicly-traded companies prior to the information
being made available to the public. Knowledgeable broker-dealers on the
team then allegedly used the non-public information to make advantageous
“insider” trades ahead of the market during the brief windows
of time between the press releases being written and being released to
the public. All in all, it is estimated that they were collectively able
to profit illegally to the tune of $30 million.
A press release from the federal prosecutors handling the matter is available
here. The charges generally include securities fraud, wire fraud, securities
fraud conspiracy, and money laundering. (18 U.S.C. § 1349; 18 u.s.c.
§ 1343; 15 U.S.C. §§ 78j(b) & 78ff, and 17 C.F.R. §
240. lOb-5; 18 u.s.c. § 371; 18 u.s.c. § 1030; 18 U.S.C. §
1028A(a)(l); 18 U.S.C. § l 956(h); and 18 U.S.C. § 2). Copies
of the indictments are accessible
here via PACER.
If you or a loved one have been charged with federal computer hacking or
insider trading charges, you should strongly consider contacting the
experienced criminal defense attorneys at Galluzzo & Arnone LLP. Their team of former prosecutors has experience defending cyber crimes
and routinely represent broker-dealers in a wide variety of criminal cases.
15 U.S.C. § 78ff,
15 U.S.C. § 78j(b),
17 C.F.R. § 240.1Ob-5,
18 U.S.C. § 1028A(a)(l),
18 u.s.c. § 1030,
18 u.s.c. § 1343,
18 U.S.C. § 1349,
18 U.S.C. § 2,
18 u.s.c. § 371,
18 U.S.C. § l 956(h),