Judge gavel, scales of justice and law books in court

A pair of traders who used inside information obtained by hacking into the U.S. Securities and Exchange Commission’s (SEC) regulatory filing database have settled with the commission.

The SEC alleged that the traders — David Kwon of California and Ukrainian resident Igor Sabodakha — and seven others participated in a scheme to hack into its filing system, known as EDGAR, to access material, nonpublic information for illegal insider trading.

The settlement agreements, which are subject to court approval, includes disgorgement of their trading profits.

Kwon agreed to pay $165,474 in disgorgement and $16,254 in interest, and Sabodakha agreed to disgorge $148,804 and pay $20,945 in interest.

Sabodakha also agreed to pay a civil penalty of $148,804.

A civil penalty for Kwon will be the subject of a motion from the SEC to the courts.

“As alleged in our complaint, the defendants engaged in an international scheme to obtain and use hacked information to enrich themselves,” said Joseph Sansone, chief of the SEC’s market abuse unit.