Ukrainian based firm, Jaspen Capital Partners Limited and Chief
Executive Officer (CEO), Andriy Supranonok had agreed to pay $30 million to
settle U.S. Securities and Exchange Commission (SEC) civil insider trading
charges on Monday (September 14).
SEC had charged the two to have traded on information from
illegally obtained news releases.
The company had
become the first of 34 defendants to settle SEC charges over allegations of theft
of more than 150,000 press releases from Newswire before the news became
public.
Traders would sometimes create what prosecutors called
“shopping lists” of companies that were expected to make announcements and pass
them on to hackers.
The illegal profit generated by traders over a period of
five years is estimated to be around $ 100 million while Jaspen and Supranonok
made approximately $25 million buying and selling contracts-for-differences
(CFDs), which are derivatives allowing for leveraged stock price bets, to trade
from 2010-2015 trading on press releases stolen from newswire service.
The case was filed in U.S. District Court for the District
of New Jersey, which entered an asset freeze and other emergency relief against
Jaspen and Supranonok, among others. Nine
of the defendants also face criminal charges, though Jaspen and Supranonok were
not criminally charged.
Without admitting or denying the SEC’s allegations, the two defendants
agreed to transfer $30 million of ill-gotten gains from the accounts which were
frozen a month ago.
"Today's settlement demonstrates that even those beyond
our borders who trade on stolen nonpublic information and use complex
instruments in an attempt to avoid detection will ultimately be caught,” said SEC
enforcement chief, Andrew Ceresney.
The settlement between Jaspen and Mr. Supranonok must be
approved by a court.
The SEC said its civil case will continue against the other
32 defendants.