U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23345 / September 14, 2015
Securities and Exchange Commission v. Dubovoy, et al., Civil Action No. 2:15-cv-06076-MCA-MAH (D.N.J., filed August 10, 2015)
SEC Obtains $30 Million from CFD Traders in Hacked News Release Scheme
The Securities and Exchange Commission today announced that it had obtained settlement offers from Ukrainian-based Jaspen Capital Partners Limited (Jaspen) and its principal Andriy Supranonok (Supranonok) in a case alleging a scheme to trade on hacked news releases. On August 10, 2015, the Commission filed a civil action in the U.S District Court for the District of New Jersey, and the court entered an asset freeze and other emergency relief against Jaspen and Supranonok, among others. On August 23, 2015, the Commission amended its complaint to add two defendants, bringing the total to 34.
Jaspen and Supranonok are alleged to have made approximately $25 million buying and selling contracts-for-differences (CFDs) on the basis of hacked press releases stolen from two newswire services between 2010 and 2014 and to have made additional profits trading on press releases stolen from a third newswire service in 2015. CFDs are derivatives that allow foreign traders to place highly-leveraged wagers on the direction of a stock's price movement. Without admitting or denying the Commission's allegations, Jaspen and Supranonok consent to the entry of court orders enjoining them from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933 and ordering them to pay $30 million in disgorgement. Their settlement offers are subject to approval by the court.
The Commission's litigation continues against the remaining 32 defendants charged in the case. For more information, see Litigation Release No. 23319 (August 13, 2015).