Insider trading ring alleged to have made $30 million from hacking press releases

Federal authorities made arrests this morning in a case involving an alleged insider trading ring that hacked several thousand press releases containing market-moving information.

The indictment, which has been seen by Business Insider, names five defendants:

  1. Ivan Turchynov (Ukrainian resident/alleged hacker)
  2. Oleksandr Ireemenko (Ukranian resident/alleged hacker)
  3. Arkadity Dubovoy (trader from Alpharetta, Georgia)
  4. Igor Duboyvoy (trader from Alpharetta, Georgia)
  5. Pavel Dubovoy (trader from Ukraine)

The indictment also lists four unnamed co-conspirators residing in New York, Georgia, and Pennsylvania.

Five arrests were made this morning, Reuters reported citing an FBI spokesperson.

Prosecutors believe that since February 2010 Ukranian hackers gained entry to newswire systems and swiped around 150,000 press releases containing access to sensitive information about company deals and earnings prior to their public release.

The victim newswires – PRNewswire, Marketwired, and Business Wire – are in the business of disseminating information on behalf of companies such as Bank of America, Boeing, Caterpillar, Hewlett Packard, Netflix, Panera Bread and Texas Instruments.

According to prosecutors, the hackers shared the stolen information with others in the ring to buy and sell shares ahead of market-moving news. The indictment said that the ring allegedly netted $US30 million in ill-gotten gains.

The indictments are expected to be announced in Newark and Brooklyn today. The Securities and Exchange Commission is expected to announce a civil suit, according to the New York Times.

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