SEC charges Russians for hacking earnings reports, Ermakov allegedly behind 2016 US election hack

Rick Steves

The leading hacker, Ivan Ermakov, is a former officer in the Russian Main Intelligence Directorate (GRU). He was previously charged in July 2018 in federal court in Washington, D.C. for his alleged role in a hacking and influence effort related to the 2016 U.S. elections.

The Securities and Exchange Commission has charged five Russian nationals with hacking into the systems of two U.S.-based filing agent companies before the announcements were made public in order to profit from the stolen corporate earnings announcements.

Defendant Vladislav Kliushin was already extradited from Switzerland, but the other four co-defendants – Ivan Yermakov, Nikolai Rumiantcev, Mikhail Irzak, and Igor Sladkov – remain at large.

Trades generated $84 million in profits

The five Russian nationals hacked two filing agents, who assist publicly traded companies with the preparation and filing of periodic reports with the SEC.

This allowed the hackers to gain access to quarterly reports containing earnings information and trade the earnings season ahead of time.

with conspiring to obtain unauthorized access to computers, and to commit wire fraud and securities fraud and with obtaining unauthorized access to computers, wire fraud and securities fraud.

The SEC points to Ivan Yermakov as the hacker who used deceptive techniques to access the filing agents’ systems and directly or indirectly providing not-yet-public corporate earnings announcements stolen from those systems to his co-defendants.

The traders used 20 different brokerage accounts located in Denmark, the United Kingdom, Cyprus and Portugal to generate profits of at least $82 million using the stolen information to make trades before over 500 corporate earnings announcements.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented: “With this action, the SEC, using its powerful analytical tools, has exposed a highly sophisticated and deceptive scheme to steal and monetize non-public corporate information.

“While we remain steadfast in our commitment to protect the integrity of our securities markets against bad actors no matter where they are located or what sophisticated tactics they use, we strongly encourage companies to shore up their safeguards against, and remain vigilant for cyber breaches that compromise their non-public information.”

They are being charged with conspiring to obtain unauthorized access to computers and to commit wire fraud and securities fraud.

FinanceFeeds webinar: Expert panel to discuss market data for multi-asset brokerages  

Ivan Ermakov allegedly behind hacking of 2016 U.S. election

The leading hacker, Ivan Ermakov, is a former officer in the Russian Main Intelligence Directorate (GRU). He was previously charged in July 2018 in federal court in Washington, D.C. for his alleged role in a hacking and influence effort related to the 2016 U.S. elections.

In October 2018, Ermakov was also charged in a federal court in Pittsburgh in connection with his alleged role in hacking and related disinformation operations targeting international anti-doping agencies, sporting federations, and anti-doping officials.

Acting United States Attorney Nathaniel Mendell stated: “The integrity of our nation’s capital markets and of its computer networks are priorities for my office.  Today’s charges show that we, the FBI, and our other law enforcement partners will relentlessly pursue those who hack, steal and attempt to profit from inside information, wherever they may hide.”

Albert Murray III, Assistant Special Agent in Charge of the FBI Washington Field Office Criminal and Cyber Division, commented: “Today’s announcement and the extradition of Vladislav Klyushin is just one more example of how the FBI and our partners are working around the clock and around the world to counter the cyber threat that we face today.

“As alleged, Klyushin and his co-defendants used various illegal and malicious means to gain access to computer networks to perpetrate their illegal trading scheme. These crimes have real consequences. And, as our efforts in this case demonstrate, the FBI is relentless in our work to identify and locate criminals like Klyushin—no matter where they are—and bring them to the U.S. to face justice.”

  • Read this next

    Retail FX

    eToro revives IPO plans after failed $10B SPAC merger

    Israeli social trading network eToro is actively exploring options for a public market listing, according to CEO Yoni Assia in an exclusive interview with CNBC.

    Digital Assets

    Meme Coin Communities Gear Up for the CoinMarketCap Crypto Awards

    CoinMarketCap’s Crypto Awards 2024, the first edition of a new annual event, is captivating the global crypto community. This is especially true for the Meme Coin Of The Year category, where voting has become a battleground for the most passionate and vibrant communities in the crypto space.

    Digital Assets

    Sui Recognized as 2024 Blockchain Solution of the Year at AIBC Eurasia Awards

    The Layer-1 Received the Top Honor at the Eurasia Awards While Experiencing a Period of Unprecedented Growth and Recognition

    Crypto Insider

    Vitalik Buterin, Sandeep Nailwal Lead Decentralized AGI Summit, Address Centralized AI Risks at ETHDenver

    Sentient and Symbolic Capital’s Decentralized AGI Summit will feature leading Decentralized AI authorities like Vitalik Buterin and Sandeep Nailwal.

    Digital Assets

    Aethir Unveils Its First Decentralized AI Node Sale

    Aethir, a leader in decentralized GPU cloud infrastructure, has announced its highly anticipated Node Sale.

    Market News

    Weekly data: Oil and Gold. How they might be affected in the short term?

    This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

    Digital Assets

    BitForex goes offline after mysterious $57 million withdrawal

    BitForex, the Hong Kong-based cryptocurrency exchange, abruptly went offline following a mysterious withdrawal of $57 million from its hot wallets. Blockchain detective ZachXBT was among the first to spotlight this, revealing that BitForex has ceased withdrawal transactions and its team appears to be unresponsive.

    Digital Assets

    Should the largest Bitcoin trade be priced in BTC or USD?

    Three days ago, the Bitcoin network witnessed a staggering transaction of 26,139 BTC, valued at $1.347 billion. This recent transaction contrasts sharply with a notable event from 2011, where 500,000 BTC were moved, then valued at around $1.13 million.

    Market News

    EURUSD volatility abound as more Americans buy houses whilst Europe lags behind

    EURUSD volatility has been on the rise, reflecting contrasting trends between the United States and Europe, particularly in the housing market.