Insider Trading: Ukrainian Hackers Accomplice Pleads Guilty

A US stockbroker pleaded guilty to conspiracy for his role in an insider-trading ring that reaped millions of dollars in illicit profits from Ukrainian hackers who pilfered corporate press releases before they were published.

Leonid Momotok, of Suwanee, Georgia, admitted he controlled a brokerage account used in a five-year scheme. At a hearing recently before US Magistrate Judge Ramon Reyes, he admitted he placed and profited from trades based on information he knew was stolen.

“I knew that this inside information was being passed to traders like myself and on the basis of this information, I executed trades on New York stock exchanges,” he said. “It was bad judgment and I am very sorry.”

Momotok, 48, was one of nine people charged in a case that federal prosecutors in Brooklyn and New Jersey described last year as the largest scheme of its kind ever prosecuted in both the scope of the alleged hacking and the number of traders involved.

Plea Deal

Momotok was indicted on conspiracy, securities fraud, money laundering and other charges. The most serious crimes of securities fraud and wire fraud carry terms of as long as 20 years in prison.

As part of a plea deal, Momotok pleaded guilty to one count of conspiracy to commit wire fraud and agreed not to challenge a prison sentence of not more than nine years when he is sentenced Dec. 9. He and his attorney, Linda Moreno, declined to comment as they left the courtroom.

The case highlights an unusual intersection of securities fraud and hacking. Prosecutors said the ring employed a criminal alliance of traders and hackers who infiltrated PR Newswire Association LLC, Marketwired Inc. and Business Wire, obtaining more than 150,000 unpublished news releases ahead of market-moving news. Traders made about $30 million in illicit gains.

The ring gained access to the three services by launching a series of orchestrated cyber-attacks using malware and obtaining the log-in credentials of newswire employees, according to the government. Hackers then circulated “shopping lists” of companies about to issue news releases, such as Panera Bread Co, Caterpillar Inc., Home Depot Inc. and Advanced Micro Devices Inc., the government said.

Leaked Releases

Members of the ring in the US and the Ukraine, including Momotok, then traded on the leaked news releases ahead of their publication, prosecutors said. Millions of dollars were laundered when they were transferred to Europe, Asia and elsewhere using shell companies, according to the government.

Momotok’s co-defendant, Vitaly Korchevsky, called the alleged “linchpin” by prosecutors, is accused of making $17 million. He pleaded not guilty to the charges and is awaiting trial. Another co-defendant, Alexander Garkusha, pleaded guilty in December and is cooperating with the US. He hasn’t yet been sentenced. A fourth man isn’t in custody.

Of the five charged in New Jersey, two have pleaded guilty and charges are pending against the other three, according to court records.

Information-Management

 

« Mobile Battery Tracks You Online
Cybersecurity Issues Are M&A Deal Breakers »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

IT Governance

IT Governance

IT Governance is a leading global provider of information security solutions. Download our free guide and find out how ISO 27001 can help protect your organisation's information.

North Infosec Testing (North IT)

North Infosec Testing (North IT)

North IT (North Infosec Testing) are an award-winning provider of web, software, and application penetration testing.

BackupVault

BackupVault

BackupVault is a leading provider of automatic cloud backup and critical data protection against ransomware, insider attacks and hackers for businesses and organisations worldwide.

ON-DEMAND WEBINAR: What Is A Next-Generation Firewall (and why does it matter)?

ON-DEMAND WEBINAR: What Is A Next-Generation Firewall (and why does it matter)?

Watch this webinar to hear security experts from Amazon Web Services (AWS) and SANS break down the myths and realities of what an NGFW is, how to use one, and what it can do for your security posture.

DigitalStakeout

DigitalStakeout

DigitalStakeout enables cyber security professionals to reduce cyber risk to their organization with proactive security solutions, providing immediate improvement in security posture and ROI.

CCN-CERT

CCN-CERT

CCN-CERT is the Spanish national government computer security incident response centre.

Advisen

Advisen

Advisen is the leading provider of data, media, and technology solutions for the commercial property and casualty insurance market including cyber risk.

TechCERT

TechCERT

TechCERT is Sri Lanka’s first and largest Computer Emergency Readiness Team (CERT).

RHEA Group

RHEA Group

RHEA Group offers aerospace and security engineering services and solutions, system development, and technologies including cyber security.

CPP Group UK

CPP Group UK

CPP Group UK develops products to help insurers add further value to their products and services through its innovative suite of new products in FinTech, InsurTech and cyber security.

Nordic Cyber Summit

Nordic Cyber Summit

Nordic Cyber Security Summit addresses a wide range of technological issues from the IT Security spectrum and also provides a wider perspective from all aspects of the industry.

Quantum Security

Quantum Security

Quantum's game-changing approach to cybersecurity brings you performance and peace-of-mind, with a raft of additional benefits: it's non-proprietary, comprehensive, scalable, and affordable.

Greenberg Traurig (GT)

Greenberg Traurig (GT)

Greenberg Traurig, LLP (GT) is a global law firm with offices in 40 locations in the United States, Latin America, Europe, Asia, and the Middle East.

Cybersecurity Center for Secure Evolvable Energy Delivery Systems (SEEDS)

Cybersecurity Center for Secure Evolvable Energy Delivery Systems (SEEDS)

SEEDS conducts research and develops innovative cybersecurity technologies, tools, and methodologies that advance the energy sector’s ability to survive cyber incidents.

Security & Intelligence Division (SID) - Singapore

Security & Intelligence Division (SID) - Singapore

Security & Intelligence Division (SID) protects Singapore from external threats and safeguards its interests in areas related to terrorism, cyber security, other transnational threats, and geopolitics

National Cyber Security Center (NCSC) - Vietnam

National Cyber Security Center (NCSC) - Vietnam

National Cyber Security Center of Vietnam has a central monitoring function and is a technical focal point for monitoring and supporting information security for people, businesses and systems.

Normalyze

Normalyze

Normalyze are solving some of the most painful problems enterprise IT security teams face in the cloud and data security space. We help enterprises protect all the data they run in the cloud.

Troye Computer Systems

Troye Computer Systems

Troye provide a complete range of digital workspace solutions that empower people to do their very best work in a safe and secure manner anywhere, anytime, using any device.

Rootly

Rootly

Rootly is an incident management platform on Slack that helps automate manual admin work during incidents.

Lighthouse IT

Lighthouse IT

At Lighthouse IT, we are focused on delivering seamless and reliable services to unlock the value of technology for your business.

Secure Blink

Secure Blink

Secure Blink provides automated application and API security solutions that empower developers and security engineers to protect critical assets from exploitation.