Federal authorities have charged five Russian nationals for allegedly stealing and front-running hundreds of corporate earnings announcements from companies like Tesla, Snap, and others.
On Monday, the U.S. Attorney’s Office for the District of Massachusetts and the Securities and Exchange Commission levied both criminal and civil charges against Vladislav Klyushin, Ivan Yermakov, Nikolai Rumiantcev, Mikhail Irzak, and Igor Sladkov for the scheme.
“The integrity of our nation’s capital markets and of its computer networks are priorities for my office,” Acting U.S. Attorney in Boston Nathaniel Mendell said in a statement.
Under the plot, which lasted more than two years between 2018 and 2020, the alleged hackers broke into the systems of two U.S. Vendors that help publicly traded companies prepare what are then still-private securities filings, according to the Justice Department and the SEC. Then, using a total of more than 500 corporate earnings announcements that were collected over the scheme’s lifetime, the defendants allegedly traded on the information often times days ahead of its public release—netting themselves profits of at least $82.5 million in the process.
According to the DOJ’s charging papers, among the other companies whose information was used in the plot included SS&C Technologies, Capstead Mortgage, Grubhub, and IBM.
“With this action, the SEC, using its powerful analytical tools, has exposed a highly sophisticated and deceoptive scheme to steal and monetize non-public corporate information,” SEC Director of Enforcement Gurbir Grewal said in a statement.
Klyushin, a prominent Russian businessman with ties to the Kremlin who was arrested in March in Switzerland, has been extradited to the U.S. To face the charges, the Justice Department said Monday. A day earlier, Vladimir Khokhlov, the press secretary of the Russian Embassy in Switzerland’s capital, called Klyushin’s extradition in a statement “yet another case of Washington’s ongoing ‘hunt’ for Russian citizens in third countries.”
In a statement shared with Coins2Day, Oliver Ciric, Klyushin’s attorney, called the indictment and extradition “disingenuous” as “the real reason for Mr. Klyushin’s arrest and the extradition to the U.S. Is in connection with the nature of his work for and contacts within the Russian government.” Ciric denied the insider-trading charges Klyushin is facing.
The four other defendants—including Yermakov, a 35-year-old former military intelligence officer who is already wanted as one of a dozen Russian hackers who tried to interfere with the 2016 U.S. Presidential election—remain at large. Yermakov was also charged in 2018 for participating in a disinformation hacking champaign related to international anti-doping agencies and sporting federations, the DOJ said.
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