New guilty plea in big U.S. insider trading hacking casePosted On: Jan. 21, 2016 12:00 AM CST
(Reuters) — A trader from an Atlanta suburb admitted to involvement in what U.S. authorities have called a more than $100 million international insider trading scheme that involved hacking into networks that distribute corporate news releases.
Igor Dubovoy, 28, pleaded guilty on Wednesday to one count of conspiracy to commit wire fraud, according to U.S. Attorney Paul Fishman in New Jersey.
Dubovoy, of Alpharetta, Georgia, became the second defendant to admit criminal wrongdoing related to the alleged theft from February 2010 to August 2015 of more than 150,000 press releases from Business Wire, Marketwired L.P. and PR Newswire.
The defendant entered his plea before U.S. District Judge Madeline Cox Arleo in Newark, New Jersey. He faces up to 20 years in prison, and according to his plea agreement agreed to make $3 million of restitution to the newswires.
Another trader from Alpharetta, Alexander Garkusha, pleaded guilty last month in Brooklyn, New York federal court to the same charge as Mr. Dubovoy.
Seven other individuals, including accused hackers from Ukraine, also face criminal charges, and 34 defendants face related U.S. Securities and Exchange Commission civil charges.
Lawrence Lustberg, a lawyer for Mr. Dubovoy, declined to comment.
Authorities said traders would give hackers "shopping lists" of press releases they wanted to see in advance, and then made trades based on them in such companies as Caterpillar Inc., The Home Depot Inc. and Panera Bread Co.
Prosecutors said Mr. Dubovoy admitted to buying stolen press releases that he knew contained nonpublic earnings data for publicly traded companies, and that he made trades based on their contents after sending them to another trader to review.
Business Wire is a unit of Warren Buffett's Berkshire Hathaway Inc. PR Newswire is a unit of Britain's UBM P.L.C., which last month said it will sell the unit to Chicago-based Cision US Inc.
None of the newswires was accused of wrongdoing.
The case is U.S. v. Dubovoy, U.S. District Court, District of New Jersey, No. 15-cr-00390.