A trader residing in the state of Georgia pleaded guilty to fraud in a New York federal court on Tuesday for involvement in an international ring of cybercriminals and traders who accessed networks of Marketwired, PR Newswire, and Business Wire to gain financial information from embargoed press releases.
The trader, Leonid Momotok, was one of the traders arrested a year ago for involvement in the scheme. The group used a network of Ukrainian hackers to gain access into the networks of the three newswires between February 2010 and August 2015, then used private financial information contained in the unpublished press releases to generate approximately $30 million in illegal profits.
“In one of the most sophisticated insider trading cases we’ve seen to-date, Momotok and other traders used information to trade on from not yet released press releases obtained by hackers from newswire services,” Diego Rodriguez, FBI assistant director-in-charge, New York Field Office, said in a statement. Momotok faces up to 20 years in prison, restitution, criminal forfeiture and fines, the Justice Department said.
According to federal prosecutors, the scheme’s mastermind is a pastor and former Morgan Stanley vice president named Vitaly Korchevsky. Prosecutors have called Korchevsky “the linchpin of a sprawling financial and hacking conspiracy.”