A Russian businessman has been convicted in the US for his involvement in a scheme that generated $90 million through securities trades based on non-public information illegally obtained from computer networks.
Vladislav Klyushin, one of five individuals charged in connection to the scam, was found guilty by a jury after a 10-day trial in Boston. He is scheduled for sentencing in May.
Klyushin operated a Moscow-based IT company that specialized in penetration testing and “Advanced Persistent Threat (APT) emulation.” These services are intended to identify vulnerabilities in computer systems using hacking methods for defensive purposes. However, Klyushin, along with two employees, Ivan Ermakov and Nikolai Rumiantcev, and two others, exploited these techniques to breach the computer networks of two US-based filing agents used by publicly traded companies for their quarterly and annual submissions.
They accessed and downloaded material non-public information, including quarterly and annual earnings reports that had not yet been filed with the SEC. With this insider information, the conspirators could predict whether a company’s financial performance would meet, exceed, or fall short of market expectations, influencing their trading strategies based on anticipated share price movements.
The group reportedly amassed nearly $100 million in earnings from approximately $9 million in investments derived from this inside information, with Klyushin personally gaining over $38 million.
Klyushin was arrested in Switzerland in March 2021 and extradited to the US; however, his co-conspirators remain at large. US Attorney Rachael Rollins commented: “The jury saw Mr. Klyushin for exactly what he is – a cybercriminal and a cheat. He repeatedly gamed the system and finally got caught. Now he is a convicted felon.”