The Securities and Exchange Commission (SEC) has snagged the first settlement in its large-scale case against traders suspected of profiting from the hacking of newswires. Ukraine-based Jaspen Capital Partners and its CEO, Andriy Supranonok, have agreed to pay $30 million to the SEC to settle.
The SEC filed its case against Jaspen and Supranonok last month as part of a broader investigation that made allegations against a total of 32 defendants. The complaint against Jaspen and Supranonok makes no mention of which stocks they are alleged to have traded on the basis of illegally obtained news--another defendant is accused specifically of profiting from the collapse of Dendreon--but the SEC has explained how it thinks they worked. Like its co-defendants, Jaspen was spotted making trades in the window between press releases being uploaded and being shared with the public.
From June 16, 2011, to April 15, 2014, Jaspen allegedly made more than 150 trades in this window. Such trades accounted for almost all of its activity. The SEC estimates the trades netted Jaspen and Supranonok approximately $25 million. Now, Jaspen and Supranonok are transferring that money and more to SEC to settle the case without admitting wrongdoing. Neither Jaspen nor Supranonok are listed in a criminal case that is advancing in parallel to the SEC investigation, suggesting that both parties are now clear from the fallout of the downfall of the alleged hacking ring.
The case is continuing for the SEC. This week it added two more defendants to its case, meaning 32 are still being pursued by the regulator even after the settlement by Jaspen and Supranonok. Vitaly Korchevsky, the trader accused in the criminal case filing of making $2.3 million from the collapse of Dendreon, is among those still being investigated by SEC. Korchevsky was granted bail late last month. Igor Dubovoy, another defendant, was granted bail recently, too, the New York Times reports, but will remain in detention until he produces $3 million.
- read the SEC release
- here's the NYT piece