Federal prosecutors are set to unveil charges in an international stock trading scheme that involved hacking into the Securities and Exchange Commission’s EDGAR corporate filing system.
The scheme allegedly netted $4.1 million for fraudsters from the U.S., Russia and Ukraine. Using 157 corporate earnings announcements, the group was able to execute trades on material nonpublic information, according to Reuters. Some of those filings were “test filings,” which corporations upload to the SEC’s website.
A press conference was scheduled for Tuesday morning. The charges are set to be announced by New Jersey U.S. Attorney Craig Carpenito alongside the SEC, the Federal Bureau of Investigation and the U.S. Secret Service, which investigates financial crimes.
The scheme involves seven individuals and operated from May to at least October 2016. Prosecutors said the traders were part of the same group that previously hacked into newswire services.
In September 2017, SEC chairman Jay Clayton announced the EDGAR database had been hacked in a lengthy statement. The Commission said the database was penetrated in 2016 but the incident wasn’t detected until August 2017.
“Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic,” Mr. Clayton said at the time. “We also must recognize—in both the public and private sectors, including the SEC—that there will be intrusions, and that a key component of cyber risk management is resilience and recovery.”