“The defendants were a well-organized group that allegedly robbed the newswire companies and their clients and cheated the securities markets and the investing public by engaging in an unprecedented hacking and trading scheme,” U.S. Attorney Paul J. Fishman, District of New Jersey, said. “The defendants launched a series of sophisticated and relentless cyber attacks against three major newswire companies, stole highly confidential information and used to enrich themselves at the expense of public companies and their shareholders.”Using proxy servers to mask their identities, Turchynov and Ieremenko posed as legitimate newswire employees and customers in order to conceal their intrusions, which may have included the installation of malware onto PR Newswire's servers and the theft of login credentials from Business Wire. The hackers also made instructional videos showcasing their exploits as means to recruit traders.
“This cyber hacking scheme is one of the most intricate and sophisticated trading rings that we have ever seen, spanning the globe and involving dozens of individuals and entities,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement, in a press release for the SEC.It is currently unclear how authorities initially detected the hacking and trading scheme. SEC Chairman Mary Jo White has revealed that investigators sorted through millions of trades and thousands of earnings releases for suspicious transaction patterns. This effort ultimately led to the involvement of six federal agencies in the investigation. The Federal Bureau of Investigation arrested five of the original nine defendants earlier this month. Four others, including Turchynov and Ieremenko, are believed to be in Ukraine, where international warrants have been issued for their arrest, officials said. The charges facing each defendant ranges from securities and wire fraud to money laundering to conspiracy. If convicted, some of the accused could face decades in prison. Title image courtesy of ShutterStock