U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23530 / May 4, 2016
Securities and Exchange Commission v. Dubovoy, et al., Civil Action No. 2:15-cv-06076-MCA-MAH (D.N.J. filed Aug. 10, 2015) (amended Aug. 23, 2015)
Trader Agrees to Settle Claims Relating to Hacked News Release Scheme; SEC's Recovery to Date in Connection with the Scheme Exceeds $52 Million
The Securities and Exchange Commission today announced that it had entered into a settlement agreement, subject to court approval, with defendant Oleksandr Makarov in a case alleging a scheme to trade on hacked news releases. In August 2015, the Commission filed a civil action and then an amended complaint in federal court in New Jersey, and the court entered an asset freeze and other emergency relief against Makarov, among others.
The SEC's amended complaint alleges that Makarov made approximately $80,000 buying and selling stock on the basis of hacked press releases stolen from two newswire services between 2012 and 2014, and made additional profits trading on press releases stolen from a third newswire service in 2015.
Without admitting or denying the allegations in the SEC's complaint, Makarov agreed to be permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933 and pay disgorgement of $100,000.
The SEC has now recovered over $52 million and obtained full injunctive relief from the 11 defendants who have agreed to settlements in this case. In addition to the settlement announced today, the settlements thus far include:
- A $30 million settlement with Ukraine-based Jaspen Capital Partners and its principal, Andriy Supranonok;
- A $4.2 million settlement with Ukraine-based Concorde Bermuda Ltd.;
- A $4.2 million settlement with France-based Guibor S.A.;
- A $3.72 million settlement with France-based Omega 26 Investments Ltd.; and
- A $10 million settlement with Russia-based defendants David Amaryan, Copperstone Alpha Fund, Copperstone Capital, Intertrade Pacific S.A., and Ocean Prime, Inc.
In February 2016, the SEC also filed a related complaint charging nine additional defendants for taking part in the hacking scheme. Combined, these additional defendants reaped over $19.5 of the more than $100 million in illicit trading profits generated by the perpetrators of this scheme.
The Commission's litigation continues against the remaining defendants charged in the case. For more information, see Press Release 2015-163 (Aug. 13, 2015) and Litigation Releases 23345 (Sep. 14, 2015), 23458 (Feb. 2, 2016), and 23498 (Mar. 24, 2016).