Security Experts:

Two More Traders Convicted in Newswire Hacking Scheme

Two more individuals, a hedge fund manager and a securities trader, have been convicted by a U.S. court for their role in a $30 million scheme that involved hacking major newswire companies.

Vitaly Korchevsky, a 53-year-old former hedge fund manager from Pennsylvania, and Vladislav Khalupsky, a 47-year-old securities trader residing in New York and Ukraine, have been convicted in a Brooklyn federal court on charges of conspiracy to commit wire fraud, conspiracy to commit securities fraud and computer intrusion, conspiracy to commit money laundering, and securities fraud. They each face up to 20 years in prison for their crimes.

The scheme involved Ukraine-based hackers breaking into the systems of Marketwired, PR Newswire and Business Wire between February 2010 and August 2015, and stealing as many as 150,000 press releases. The hackers sent the stolen press releases containing nonpublic financial information to several traders who quickly monetized it.

Korchevsky and Khalupsky are said to have traded based on nonpublic press releases issued by hundreds of companies, including Align Technology, CA Technologies, Caterpillar, HP, Home Depot, Panera Bread, and Verisign.

According to authorities, Korchevsky made more than $15 million over the course of the scheme, while Khalupsky, who traded for the criminal network and received a percentage of the profits, made at least $500,000.

“The evidence at trial also demonstrated that the defendants went to great lengths to conceal their roles in the criminal scheme,” the Justice Department said. “The conspirators used separate phones, computers and hotspots to conduct their illegal trading activity, and routinely deleted emails and/or destroyed hardware that contained evidence of their crimes. The conspirators also directed that payments received for the illegal profits they generated for the criminal network be made to offshore shell companies.”

Korchevsky and Khalupsky were among nine individuals accused of making $30 million through the newswire hacking scheme. Three of the suspects are still at large, but all the others, including a Ukrainian national responsible for hacking into the newswire firms, have been convicted or pleaded guilty.

The scheme involved many people, not just the nine individuals charged by the Justice Department. A separate civil case filed by the U.S. Securities and Exchange Commission (SEC) names 34 people who allegedly made $100 million in unlawful profits through this operation.

Related: Georgia Trader Admits to Role in Newswire Hacking Scheme

Related: Ukrainian Suspected of Leading Carbanak Gang Arrested in Spain

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Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.