Judge gavel, scales of justice and law books in court

A former U.S. hedge fund manager has been sentenced to five years in jail, fined and ordered to forfeit millions for his role in an insider trading scheme that involved hacking into the major U.S. newswires to steal and front-run corporate news announcements.

Former fund manager Vitaly Korchevsky was sentenced to 60 months in prison, fined $250,000 (all figures in U.S. dollars) and ordered to forfeit $14.4 million after he was convicted in a U.S. federal court of securities fraud, conspiracy to commit securities fraud, computer intrusion and wire fraud.

Korchevsky was convicted last year following a four-week jury trial for his involvement in a scheme to hack into the systems of several U.S. newswires — Marketwired L.P., PR Newswire Association LLC and Business Wire — to steal press releases containing corporate earnings and other news.

The hackers passed along the stolen information to traders, including Korchevsky, enabling them to trade ahead of its public release. U.S. authorities say that the scheme netted about $30 million in illegal profits, much of which was routed to the hackers in the Ukraine.

Earlier this year, Korchevsky’s co-defendant, securities trader Vladislay Khalupsky, was sentenced to 48 months in prison after being convicted on the same charges.

“Korchevsky and Khalupsky will now pay the price for using their experience as traders to generate millions of dollars in unlawful trades based on hacked information,” said Richard Donoghue, U.S. attorney for the Eastern District of New York.

“Today’s sentence sends a powerful message that, no matter how sophisticated or novel the scheme, cybercriminals and traders who steal information from U.S. companies and undermine the integrity of our financial markets will be held accountable for their actions,” Donoghue added.