Two former investment bankers, one of whom is also a priest, have been found guilty of an elaborate scam – hacking newswires to read press releases prior to publication, and trade millions using this insider information.
Vitaly Korchevsky, formerly a veep at Morgan Stanley and a pastor at the Slavic Evangelical Baptist Church in Philadelphia, USA, and ex-broker Vladislav Khalupsky were this month found guilty of securities fraud by a jury in New York, and are facing 20 years in the slammer.
According to court documents, the two colluded with a Ukrainian hacking gang and investors in the US, Russia, France, and Cyprus to realized more than $100m in illicit profits. America’s financial watchdog, the Securities and Exchange Commission, said it has since recovered $53m of the haul.
The scam, carried out between 2010 and 2015 involved Ukrainian hackers getting into the servers of two unnamed newswire services, one in New York and the other in Canada. The miscreants searched for embargoed press releases on companies’ quarterly financial figures, which are typically privately submitted to a newswire a couple of days before they are published, and accessed more than 100,000 of them before being caught.