Russian businessman convicted of U.S. hack-and-trade charges

TOPPAN Holdings

14/02/2023 17:25

By Nate Raymond
       BOSTON, Feb 14 (Reuters) - A U.S. jury convicted a
wealthy Russian businessman of charges that he and others with
ties to the Kremlin made tens of millions of dollars by hacking
U.S. computer networks to obtain secret, inside information
about multiple companies which they used to make trade.
    Vladislav Klyushin, the owner of a Moscow-based information
technology company called M-13 that did work for the Russian
government, was found guilty on Tuesday by a federal jury in
Boston of charges of conspiracy, wire fraud and securities fraud
following a trial, prosecutors said.
    Of the five Russian nationals charged with carrying out the
nearly $90 million scheme, Klyushin, 42, was the only one to be
arrested and face trial after he was apprehended in Switzerland
during a ski trip in March 2021 and extradited to the United
States.
    The other four remain at large, including Ivan Ermakov, a
former Russian military intelligence officer who worked at M-13
and is wanted by the U.S. government for his alleged involvement
in hacking schemes to interfere in the 2016 presidential
election and target anti-doping agencies.
    Klyushin's trial came a low point in U.S.-Russia relations
following Russian President Vladimir Putin's invasion of Ukraine
last year. While the charges predate the war, Klyushin's
connections to the Kremlin have long intrigued U.S. authorities.
    His lawyers had argued there was zero evidence he possessed
inside information and knew of any hacking, and his attorney in
Switzerland said the real reason Klyushin was charged was his
Russian government connections.
    That lawyer, Oliver Ciric, has said U.S. intelligence
officials tried to recruit Klyushin in 2019 and that British
intelligence did the same a year later.
    Prosecutors said Klyushin and his associates made nearly $90
million trading stocks based on yet-to-be-announced information
that hackers stole about hundreds of publicly traded companies.
    The hackers broke into the networks of two firms that help
publicly traded companies file reports with U.S. securities
regulators, Donnelley Financial Solutions  DFIN.N  and Toppan
Merrill, prosecutors said.
    Hackers from 2018 to 2020 viewed and downloaded
yet-to-be-announced earnings reports for hundreds of companies
including Tesla Inc  TSLA.O  and Microsoft Corp  MSFT.O , which
Klyushin and others used to trade before the news was public.
    The stolen financial information about those companies
allowed Klyushin to turned a $2 million investment into nearly
$21 million and the group as a whole to turn about $9 million
into nearly $90 million, prosecutors said.
    Defense lawyer Maksim Nemtsev at trial argued the
prosecution's case was built on "gaping holes and inferences,"
and that trading was based on news and social media posts that
Klyushin's company monitored to forecast stocks.
 (Reporting by Nate Raymond in Boston, Editing by Alexia
Garamfalvi and Josie Kao)
 ((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond;
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