SEC Lacks Staff to Block Shareholder Proposals, But Can Still Sue Ukranian Hacker for Manipulating EDGAR System
Wall Street Journal
MarketWatch
The SEC’s complaint alleges that Ukrainian hacker Oleksandr Ieremenko—who was charged in 2015 for hacking newswire services—turned his attention to EDGAR and, using deceptive hacking techniques, gained access in 2016. Ieremenko extracted EDGAR files containing nonpublic earnings results. The information was passed to individuals who used it to trade in the narrow window between when the files were extracted from SEC systems and when the companies released the information to the public. In total, the defendants made trades based on nonpublic information found in 157 earning announcements from May to October 2016 and generated at least $4.1 million in illegal profits.
“The trader defendants charged today are alleged to have taken multiple steps to conceal their fraud, including using an offshore entity and nominee accounts to place trades,” said Enforcement Division Co-Director Steven Peikin. “Our staff’s sophisticated analysis of the defendants’ trading exposed the common element behind their success, providing overwhelming evidence that each of them traded based on information hacked from EDGAR.”