Four metro Atlanta men are among nine people charged in what government officials describe as the largest known computer hacking scheme and securities fraud case.
The international scheme involved hacking into newswires to obtain and make trades based on information in confidential news releases about companies, according to acting U.S. attorney Kelly Currie. The alleged hackers would then make trades ahead of the information being released to the public.
More than 150,000 press releases were stolen from three major newswire companies and were used to make $30 million in illegal trading profits, said government officials.
Among those indicted in New York and New Jersey: Arkadiy Dubovoy, 51, and Igor Dubovoy, 28, of Alpharetta. They are charged with wire fraud conspiracy, securities fraud conspiracy, wire fraud, securities fraud, and money laundering conspiracy. Also indicted were Leonid Momotok, 47, of Suwanee, and Alexander Garkusha, 47, of Alpharetta. They were charged with wire fraud conspiracy, securities fraud conspiracy and money laundering conspiracy.
Others who were indicted are from Ukraine, New York and Pennsylvania.
Arkadiy Dubovoy, Igor Dubovoy, Momotok, and Garkusha were all arrested at their homes in Georgia, and were scheduled to appear Tuesday afternoon in federal court in Atlanta.
The defendants and their co-conspirators “formed an alliance of hackers and securities industry professionals to systematically steal valuable inside information and profit by trading ahead of authorized disclosures to the investing public,” acting U.S. attorney Kelly Currie said.
In addition to federal criminal charges against the nine people, there were also civil charges filed in a fraud scheme that involved a total of 16 individual traders and 14 businessess, CNNMoney reported. Illegal profits totaled $100 million, it said.
From February 2010 to August 2015, the government said, two Ukrainian computer hackers broke into the computer networks of Marketwired, PR Newswire Association, and Business Wire. They stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material financial information.
The hackers then shared the stolen press releases with traders including the Georgia men, officials said. The hackers and traders used foreign shell companies to share in the illegal trading profits that resulted, authorities charged.
The illegal trading resulted in gains of more than $30 million, of which Arkadiy Dubovoy accounted for more than $11 million, authorities said.
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