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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23682 / November 2, 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)

Russian Traders Agree to Settle Claims Relating to Hacked News Release Scheme; SEC's Recovery to Date Exceeds $53 Million

The Securities and Exchange Commission today announced that it had entered into settlement agreements, subject to court approval, with Russian defendants Alexander Fedoseev and Roman Lavlinskiy in a case alleging a scheme to trade on hacked news releases. In August 2015, the Commission filed a civil action and amended complaint in federal court in New Jersey, and the court entered an asset freeze and granted other emergency relief against Fedoseev, Lavlinskiy, and others.

The SEC's amended complaint alleges that Fedoseev and Lavlinskiy collectively made approximately $1.1 million buying and selling stock on the basis of hacked press releases stolen from two newswire services between 2012 and 2014.

Without admitting or denying the allegations in the SEC's complaint, Fedoseev and Lavlinskiy 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, joint and severally, pay disgorgement of more than $1.22 million including all of the defendants' funds that are subject to the asset freeze.

The SEC has now obtained settlements from 13 defendants, who have consented to judgments ordering over $53 million and full injunctive relief. 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.;
  • A $10 million settlement with Russia-based defendants David Amaryan, Copperstone Alpha Fund, Copperstone Capital, Intertrade Pacific S.A., and Ocean Prime, Inc.; and
  • A $100,000 settlement with Ukrainian defendant Oleksandr Makarov

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), 23498 (Mar. 24, 2016), and 23530 (May 4, 2016).

 

http://www.sec.gov/litigation/litreleases/2016/lr23682.htm


Modified: 11/02/2016