Two ukrainians charged with hacking into SEC EDGAR database

Traders made transactions before at least 157 earnings releases from May to October 2016, generating at least $4.1 million in illegal profits.

The Securities and Exchange Commission and Department of Justice announced charges Tuesday against an alleged Ukrainian hacker and several other suspects in a scheme where nonpublic information was taken from the commission’s corporate filing system and used for illegal financial trading.

Oleksandr Ieremenko is alleged to have hacked into the SEC’s EDGAR system, accessing “test files,” which companies can use to submit information ahead of their public earnings reports. Sometimes companies include nonpublic information in those filings. According to the SEC and U.S. Attorney’s Office of  New Jersey, Ieremenko extracted nonpublic test files from SEC servers, and then passed the information to different groups of traders.

The traders made transactions before at least 157 earnings releases from May to October 2016, generating at least $4.1 million in illegal profits.

The SEC discovered the breach in 2016 after realizing there was a vulnerability in the EDGAR system. The agency didn’t suspect until August 2017, however, that the breached information was used for illicit trades.

Ieremenko, 27, and a co-conspirator, Artem Radchenko, 26, have been charged with securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy, wire fraud and computer fraud. Neither person has been apprehended.

Ieremenko has been on the run since 2015, when he is alleged to have conspired with another group of securities traders to hack into three newswire distribution companies and steal press releases being prepared for distribution that contained market-sensitive information.

Additionally, the SEC has charged the following people and entities with violating the federal securities antifraud laws:

• Sungjin Cho, Los Angeles
• David Kwon, Los Angeles
• Igor Sabodakha, Ukraine
• Victoria Vorochek, Ukraine
• Ivan Olefir, Ukraine
• Andrey Sarafanov, Russia
• Capyield Systems, Ltd. (owned by Olefir)
• Spirit Trade Ltd.

The SEC is looking for a judgment where those entities would pay penalties and return the money they made from the illegal trades.

You can read the full charging document below.

[documentcloud url=”http://www.documentcloud.org/documents/5684882-Comp-pr2019-1.html” responsive=true]

Government

• FBI officials say AI is bolstering adversaries, emphasizing need to focus on cyber basics, patching

• Feds accuse China of ‘systematic’ distillation of U.S. AI models

• CIA’s Michael Ellis says cyber intelligence is changing how the agency operates

• The G7 tells industry to hurry up and prep for post-quantum encryption

Technology

• European parliament members call for slowdown of Serbia’s EU entry over spyware use

• FCC proposes public scorecard to rate telecoms on anti-robocall efforts

• Pegasus, NoviSpy variant spyware found on devices of Serbian activists

• Wyden seeks upgraded NSA security guidance on commercial VPN use

Threats

• Microsoft discloses two actively exploited zero-days among 974 vulnerabilities

• Russian national extradited to US for alleged involvement in bank-account takeover scheme

• Attackers exploit zero-days in consistently besieged SonicWall product

• Jail time for Maine child in 764 marks turning point in federal law enforcement

Policy

• Whistleblower says USPS deploying new, ‘untested’ IT systems governing mail-in ballots

• ‘Watershed 250’ test program in Texas looks to private sector for water cybersecurity help

• Former sexual abuse victims say Grok used their images, videos to train deepfake capabilities

• Cyber threats nudge Trump to sign executive order on foreign equipment in U.S. energy infrastructure