Russian national Vladislav Klyushin was found guilty of participating in a global scheme involving the hacking of US computer networks to steal confidential earnings reports, which helped criminals reap $90,000,000 in illegal profits.
Klyushin was extradited to the United States in December 2021 to face charges of hacking the systems of two US-based filing agents that US companies used to file earnings reports through the Securities and Exchange Commissions (SEC) system.
The accused was the owner of M-13, a Moscow-based cybersecurity company offering penetration testing and APT emulation services, even claiming to have the Russian state in its client base.
Besides these services, evidence produced by the FBI shows that Klyushin also ran a hacking scheme, receiving money from shady investors and using it to trade the securities of companies in the United States, returning 40% profits to investors. .
Companies using hacked agent systems services include Capstead Mortgage Corp., Tesla, Inc., SS&C Technologies, Roku, and Snap, Inc.
These confidential financial reports contain crucial information on the performance of large companies and can provide information for accurate trading forecasts.
“Armed with this information before it was released to the public, Klyushin and his co-conspirators knew in advance, among other things, whether a company’s financial performance would meet, exceed, or fall short of market expectations – and so if its share the price would probably go up or down after the public announcement of the results,” says a Ministry of Justice press release.
“Klyushin then traded based on this information stolen from brokerage accounts held in his own name and in the name of others.”
$38 million in profits from securities fraud
These illegal transactions took place on the NASDAQ and NYSE between January 2018 and September 2020, with more than 97% of the transactions recorded involving entities that had filed their reports with the SEC through the compromised agents.
According to chargeKlyushin and his co-conspirators, Ivan Ermakov (a former officer of the Russian military intelligence agency GRU) and Nikolai Rumiantcev, made $100 million and then lost nearly $10 million, enjoying a return of 900% during a period of around 25% stock market return.
It is estimated that of this amount, Klyushin brought in more than $38,000,000, with 60.5% being profits from his personal business activities and the remaining profit coming from indirect investments made on behalf of others.
The Jury found Klyushin guilty conspiracy to gain unauthorized access to computers or to commit wire fraud, as well as aiding and abetting wire fraud, unauthorized computer access and securities fraud.
The above individuals face imprisonment of up to 30 years and fines of up to $250,000 or double the gross gain or (taxed) loss. Klyushin will be sentenced on May 4, 2023.