The US Tries Five Russians Accused Of Insider Trading After Obtaining Hacking Data

The US prosecutes businessmen with close ties to the Kremlin. (photo: doc. unsplash)

JAKARTA - Five Russians, including a Kremlin-linked businessman who is now in US custody, are accused of carrying out an insider trading scheme worth USD 82 million. This transaction allowed them to profit from company information stolen through hacking, US authorities said Monday, December 20.

Vladislav Klyushin, the owner of a Moscow-based information technology company who prosecutors say has extensive ties to the Russian government, was extradited on Saturday, December 18 from Switzerland to face charges of conspiracy, securities fraud, and other charges in Boston.

Klyushin, who was arrested in Switzerland in March while en route for a ski vacation, briefly emerged from a Massachusetts prison during a virtual court hearing. An interim bail hearing is set for Thursday.

Russian national Vladislav Klyushin was extradited to the U.S. from Switzerland and is charged, along with four other Russians, for his alleged role in a global conspiracy to obtain unauthorized access to U.S. networks to commit wire and securities fraud. https://t.co/Egeiqs6Xge pic.twitter.com/xgp3FkBKkL

— FBI (@FBI) December 20, 2021

As reported by Reuters, Prosecutors also accused him and several others of trading the company's earnings reports obtained by hacking the computer systems of two vendors that helped the company file quarterly and annual reports with the U.S. Securities and Exchange Commission.

Those companies include IBM Corp, Snap Inc, and Tesla Inc. Prosecutors said Klyushin, 41, and employees of his company M-13 LLC placed trades for themselves as well as for clients in exchange for a cut in their profits.

Authorities say the computer system was hacked by Ivan Yermakov, an M-13 employee who was among several Russian military intelligence officers charged in 2018 for carrying out a hacking scheme to interfere with the 2016 US presidential election and targeting anti-doping agents.

The scheme in total netted at least $82.5 million from 2018 to 2020, the SEC said in a related lawsuit.

Yermakov is still at large, along with three other defendants: M-13 director Nikolai

Rumiantcev and two Russian businessmen who prosecutors say traded the hacked information, Mikhail Irzak and Igor Sladkov.

They also could not be reached for comment by Reuters at this time.

Klyushin's lawyers called the case politically motivated and argued the real reason he was wanted was his work and contacts within the Russian government. The lawyer also called the case part of Washington's hunt for the Russians.

Acting US Attorney Nathaniel Mendell stressed Klyushin's "widespread relationship" with the Kremlin, Klyushin's lawyer said authorities did not know at the start of the two-year investigation "where the facts and investigations will lead us."