Hedge fund manager sentenced to 60 months security fraud, hacking scheme

A hedge fund manager convicted of conspiracy to commit securities fraud and computer intrusion, among other, crimes was sentenced in U.S. District Court to 60 months in prison Thursday.

Vitaly Korchevsky, 53, was also ordered to pay a $14.4 million forfeiture and a $250,000 fine for his role in a scheme in which Ukrainian hackers broke into the networks of Marketwired L.P., PR Newswire Association LLC and Business Wire to steal more than 150,000 press releases containing financial information that wasn’t yet public, then sharing it with Korchevsky and other traders, who used it to execute trades that raked in $30 million profit between 2010 and 2015.

“Today’s sentence sends a powerful message that, no matter how sophisticated or novel the scheme, cybercriminals and traders who steal information from U.S. companies and undermine the integrity of our financial markets will be held accountable for their actions,” Richard P. Donoghue, U.S.  Attorney for the Eastern District of New York, said in a Justice Department release. The trader’s co-defendant, Vladislay Khalupsky, 48, was convicted of the same charges and received a 48-month prison sentence Jan. 11.

U.S. Secret Service Special Agent-in-Charge David E. Beach attributed the successful arrest and conviction of Korchevsky and his coconspirators to “building strong partnerships between local, state and federal law enforcement.”

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