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Federal authorities announced Monday the extradition of a Russian citizen and unveiled charges against four others for their involvement in a hacking scheme to steal and trade on secrets from U.S. public companies.
Vladislav Klyushin was extradited to the United States from Switzerland on Dec. 18 for wire fraud, securities fraud and obtaining unauthorized access to computers, the Department of Justice said in a press release. Charges were unsealed Monday morning in U.S. District Court in Massachusetts.
Four other Russian nationals — Ivan Ermakov, Nikolai Rumiantcev, Mikhail Vladimirovich Irzak and Igor Sergeevich Sladkov — were also charged by the DOJ and the Securities and Exchange Commission for participating in the scheme, but remain at large.
The charging documents say that the five alleged hackers stole nonpublic information from the computer networks of two vendors used by public companies to make quarterly and annual filings to the SEC, and then traded on that information between January of 2018 and September of 2020. Klyushin and his co-conspirators earned tens of millions of dollars in profits from these illegal trades, the DOJ and SEC said.
“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,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcements said in a press release.
During a single two week period between Oct. 22, 2018 and Nov. 6 of that year, the hackers gained access to one of the compromised vendors and downloaded the earnings results of several companies including Tesla Inc.
TSLA,
Capstead Mortgage Corp. , SS&C Technologies
SSNC,
and Nevro Corp.
NVRO,
days before those earnings results were announced to the broader public, the Justice Department said.
The hackers then traded on this information, selling short the shares of companies who were set to announce disappointing results and purchasing the shares of companies whose earnings were better than expected.
“The integrity of our nation’s capital markets and of its computer networks are priorities for my office,” said Acting U.S. Attorney Nathaniel Mendell, in a Monday statement. “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.”
