Dive Brief:
- Two of the first 34 defendants in an insider trading scheme agreed to pay $30 million to settle civil insider trading charges on Monday, reports Reuters.
- The scheme involved hacking into the networks of companies that distribute corporate news releases, such as PR Newswire.
- The SEC said the plot resulted in more than $100 million of illegal profits over five years.
Dive Insight:
Jaspen Capital Partners Ltd and Chief Executive Andriy Supranonok, both from Kiev, Ukraine, are the first defendants to settle the case, Reuters reports.
The scheme started around February 2010, and the SEC said the network included traders in New York, Cyprus, France, Malta and Russia. Prosecutors said that hackers infiltrated the databases of press release distributors, obtaining sensitive corporate information such as financial results before they became public.
The SEC said the defendants agreed to transfer $30 million of their illegally procured proceeds from frozen brokerage accounts to the SEC.
"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.
The SEC will continue the civil case against the other 32 defendants.
