SEC Obtains Final Judgment Against Foreign National Charged with Selling Purported "Insider Trading Tips" On the Dark Web
Litigation Release No. 25447 / July 21, 2022
Securities and Exchange Commission v. Apostolos Trovias, No. 1:21-cv-05925-ER (S.D.N.Y. filed July 9, 2021)
On July 19, 2022, the Securities and Exchange Commission obtained a final judgment against Apostolos Trovias, a Greek national, whom the SEC previously charged with perpetrating a fraudulent scheme to sell what he called "insider trading tips" on the Dark Web. The Dark Web, which facilitates anonymity by obscuring users' identities, allows users to purchase and sell illegal products and services.
According to the SEC's complaint, filed on July 9, 2021, in federal district court in New York, New York, Trovias-operating under the pseudonym "TheBull"-engaged in a deceptive scheme to offer and sell so-called "insider trading tips" on Dark Web marketplaces. As alleged in the complaint, Trovias claimed that the information he was selling consisted of order-book data from a securities trading firm that was provided to Trovias by an employee of the firm. Trovias allegedly sold over 100 subscriptions for daily tips to investors via the Dark Web over the course of the scheme. The complaint alleges that, in addition to order-book information, Trovias sold the pre-release earnings reports of publicly traded companies.
In a parallel action, United States v. Apostolos Trovias, No. 21 Crim. 378 (JFK) (S.D.N.Y.), the U.S. Attorney's Office for the Southern District of New York charged Trovias for this conduct. Trovias was detained in Peru in May 2021 in connection with the criminal case and extradited to the United States. Trovias pleaded guilty to securities fraud in his criminal case on April 14, 2022, and was sentenced to time served and ordered to forfeit $6,700 in proceeds from his scheme.
Trovias consented to entry of a final judgment permanently enjoining him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, a permanent injunction against establishing or operating any website permitting the offer, sale, or purchase of nonpublic information of any issuer of publicly traded securities, and disgorgement and prejudgment interest totaling $6,702.49, which will be deemed satisfied by the forfeiture order entered against him in United States v. Apostolos Trovias.
The SEC's investigation was conducted by Jon Daniels of the Crypto Assets and Cyber Unit and Morgan B. Ward Doran, currently with the Strategic Hub for Innovation and Financial Technology. The SEC's litigation was led by Victor Suthammanont. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, and the Internal Revenue Service.