SEC v. Vladislav Kliushin; Nikolai Rumiantcev; Mikhail Irzak; Igor Sladkov; and Ivan Yermakov, No. LR-25295, District of Massachusetts (Dec. 22, 2021) — Press Release

SEC Charges Five Russians in $80 Million Hacking and Trading Scheme Litigation Release No. 25295 / December 22, 2021 Securities and Exchange Commission v. Vladislav Kliushin, Nikolai Rumiantcev, Mikhail Irzak, Igor Sladkov, and Ivan Yermakov, No. 21-CV-12088 (D. Mass filed December 20, 2021) The Securities and Exchange Commission announced fraud charges against five Russian nationals for engaging in a multi-year scheme to profit from stolen corporate earnings announcements obtained by hacking into the systems of two U.S.-based filing agent companies before the announcements were made public. The filing agents assist publicly traded companies with the preparation and filing of periodic reports with the SEC, including quarterly reports containing earnings information. The SEC's complaint, filed in federal district court in Massachusetts, alleges that defendant Ivan Yermakov used deceptive hacking techniques to access the filing agents' systems and directly or indirectly provided not-yet-public corporate earnings announcements stolen from those systems to his co-defendants Vladislav Kliushin, Nikolai Rumiantcev, Mikhail Irzak, and Igor Sladkov. According to the complaint, from 2018 through 2020, the traders used 20 different brokerage accounts located in Denmark, the United Kingdom, Cyprus and Portugal to generate profits of at least $82 million using the stolen information to make trades before over 500 corporate earnings announcements. The defendants allegedly shared a portion of their enormous profits by funneling them through a Russian information technology company founded by Kliushin and for which Yermakov and Rumiantcev serve as directors. The U.S. Attorney's Office for the District of Massachusetts announced criminal charges against the five defendants named in the SEC's action and that defendant Vladislav Kliushin was extradited from Switzerland. The SEC's complaint charges each of the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition, the complaint charges Kliushin, Rumiantcev, Irzak, and Sladkov with violating Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder through or by the means of Yermakov, in violation of Section 20(b) of the Exchange Act. Finally, the complaint charges Kliushin, Rumiantcev, Irzak, and Sladkov with aiding and abetting Yermakov's violations, pursuant to Section 15(b) of the Securities Act and Section 20(e) of the Exchange Act. The SEC seeks a final judgment ordering the defendants to pay penalties, return their ill-gotten gains with prejudgment interest, and enjoining them from committing future violations of the antifraud provisions. The SEC's investigation, which is ongoing, was conducted by Megan Bergstrom, David Bennett, and Diana Tani of the SEC's Market Abuse Unit with assistance from Darren Boerner of the Market Abuse Unit and IT Forensics staff Ken Zavos. Joseph Sansone, Chief of the Market Abuse Unit, supervised the investigation. The Division of Economic and Risk Analysis provided substantial assistance. David Mendel and James Connor are leading the SEC's litigation, under the supervision of David Gottesman. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, the Danish Financial Supervisory Authority, and the Cyprus Securities and Exchange Commission. SEC Complaint

SEC Charges Five Russians in $80 Million Hacking and Trading Scheme Litigation Release No. 25295 / December 22, 2021 Securities and Exchange Commission v. Vladislav Kliushin, Nikolai Rumiantcev, Mikhail Irzak, Igor Sladkov, and Ivan Yermakov, No. 21-CV-12088 (D. Mass filed December 20, 2021) The Securities and Exchange Commission announced fraud charges against five Russian nationals for engaging in a multi-year scheme to profit from stolen corporate earnings announcements obtained by hacking into the systems of two U.S.-based filing agent companies before the announcements were made public. The filing agents assist publicly traded companies with the preparation and filing of periodic reports with the SEC, including quarterly reports containing earnings information. The SEC's complaint, filed in federal district court in Massachusetts, alleges that defendant Ivan Yermakov used deceptive hacking techniques to access the filing agents' systems and directly or indirectly provided not-yet-public corporate earnings announcements stolen from those systems to his co-defendants Vladislav Kliushin, Nikolai Rumiantcev, Mikhail Irzak, and Igor Sladkov. According to the complaint, from 2018 through 2020, the traders used 20 different brokerage accounts located in Denmark, the United Kingdom, Cyprus and Portugal to generate profits of at least $82 million using the stolen information to make trades before over 500 corporate earnings announcements. The defendants allegedly shared a portion of their enormous profits by funneling them through a Russian information technology company founded by Kliushin and for which Yermakov and Rumiantcev serve as directors. The U.S. Attorney's Office for the District of Massachusetts announced criminal charges against the five defendants named in the SEC's action and that defendant Vladislav Kliushin was extradited from Switzerland. The SEC's complaint charges each of the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition, the complaint charges Kliushin, Rumiantcev, Irzak, and Sladkov with violating Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder through or by the means of Yermakov, in violation of Section 20(b) of the Exchange Act. Finally, the complaint charges Kliushin, Rumiantcev, Irzak, and Sladkov with aiding and abetting Yermakov's violations, pursuant to Section 15(b) of the Securities Act and Section 20(e) of the Exchange Act. The SEC seeks a final judgment ordering the defendants to pay penalties, return their ill-gotten gains with prejudgment interest, and enjoining them from committing future violations of the antifraud provisions. The SEC's investigation, which is ongoing, was conducted by Megan Bergstrom, David Bennett, and Diana Tani of the SEC's Market Abuse Unit with assistance from Darren Boerner of the Market Abuse Unit and IT Forensics staff Ken Zavos. Joseph Sansone, Chief of the Market Abuse Unit, supervised the investigation. The Division of Economic and Risk Analysis provided substantial assistance. David Mendel and James Connor are leading the SEC's litigation, under the supervision of David Gottesman. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, the Danish Financial Supervisory Authority, and the Cyprus Securities and Exchange Commission. SEC Complaint