(Reuters) – A Georgia-based real estate developer pleaded guilty on Monday to participating in what U.S. Authorities say was a $100 million insider trading scheme that involved hacking into networks that distribute corporate news releases.
Alexander Garkusha, who authorities say traded on inside information, pleaded guilty to conspiracy to commit wire fraud, becoming the first defendant criminally charged in the case to admit wrongdoing.
“I am very sorry I did this. I know that it was against the law,” Garkusha told a judge during a court hearing in Brooklyn.
Garkusha, a resident of Alpharetta and Cumming, Georgia, near Atlanta, was arrested in August along with four other individuals in what authorities said was the first criminal case over a securities fraud scheme involving hacked inside information.
Prosecutors said Garkusha, 47, who was born in Russia and is a U.S. Citizen, was among a group of traders who executed securities transactions based on inside information stolen by hackers in Ukraine.
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In a related case, nine people were indicted and 32 defendants were named in a lawsuit by U.S. Securities regulators for engaging in a scheme to steal over 150,000 press releases from Business Wire, Marketwired and PR Newswire before the news became public.
Business Wire is a unit of Warren Buffett’s Berkshire Hathaway Inc. Britain’s UBM last week announced it would sell PR Newswire to Cision for $841 million.
The U.S. Securities and Exchange Commission said the long-running scheme enabled the defendants to make over $100 million. The more narrowly focused criminal case against Garkusha alleged that he and his co-defendants earned $30 million.
The case is U.S. V. Korchevsky et al, U.S. District Court, Eastern District of New York, No. 00381.