Ukranians make millions after hacking SEC system in NJ, feds say
Two Ukrainian nationals have been indicted on computer hacking and securities fraud charges that claim they broke into U.S. Securities and Exchange Commission computer systems in New Jersey and stole trading information that made them millions.
But they have not been arrested and remain at large.
In the 16-count indictment, Artem Radchenko and Oleksandr Ieremeno are charged with securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy, and wire and computer fraud. If convicted they could face at least 20 years in prison.
According to U.S. Attorney for New Jersey Craig Carpenito the duo hacked their way into the SEC’s Electronic Data Gathering Analysis And Retrieval system, known as EDGAR, and swiped thousands of files, including earnings reports containing confidential financial information.
Carpenito would not disclose exactly where the SEC computer system is located.
“New Jersey has many of the citizens that are investors in these companies, who are investors who were wronged by the trading that occurred to their disadvantage and to their detriment," Carpenito said Tuesday.
When asked if the six other defendants charged with using stolen information to make profitable trades have been arrested, Carpenito declined to comment.
He said the defendants swiped the data then they and their partners made more than $4 million in profit by conducting trades and selling information to other traders before it was released to the investing public.
“These draft reports contained valuable information about the company’s financial performance, quarterly earnings, year-end earnings, and potential mergers and acquisitions amongst other material events," Carpenito said.
Carpenito pointed out keeping this information confidential prior to its public release “is a critical part of our security system, and it’s critical to the companies and the SEC and their capability to regulate the markets.”
While no arrests have been made, he said “this type of public identification helps deter computer intrusions and securities fraud by stripping the bad actors of the anonymity.”
“By making clear criminal actions have consequences, we deter schemes that victimize the United States, its critical infrastructure, our companies and our citizens.”
The SEC and the U.S. Attorney for New Jersey worked with the FBI, the U.S. Secret Service the Justice Department’s Office of International Affairs on the investigation.
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com