Case combining hacking and securities fraud may be first, but certainly not last
A Georgia man pleaded guilty in what authorities say is the first criminal securities fraud case involving information obtained by computer hacking.
Alexander Garkusha, a real estate developer, pleaded guilty to conspiracy to commit wire fraud in a Brooklyn federal courtroom on a recent Monday. He admitted to obtaining corporate press releases from distribution services before they were released to the public and using them to profit from stock trades. Garkusha admitted to profiting some $125,000 in just three months.
Hackers in Ukraine stole over 150,000 press releases from PR Newswire, Marketwired and Business Wire. Garkusha, a U.S. citizen born in Russia, was among nine people indicted by securities regulators. He is the first to admit wrongdoing and will be sentenced May 6. He agreed to forfeit to authorities the $125,000 made from insider trades. Charges remain pending against Igor Dubovoy, Arkadiy Dubovoy, Vitaly Korchevsky and Leonid Momotok, who have all pleaded not guilty.
As more and more sensitive corporate data becomes stored on internet-accessible servers, we expect to see many more cases of this nature. At the Brill Legal Group, we have extensive experience in defending against both fraud charges and computer hacking charges. If you are facing charges of securities fraud or computer crimes, contact us today.