|
 Alexander Garkusha, who authorities say traded on inside
information, pleaded guilty in federal court in Brooklyn, New York,
to conspiracy to commit wire fraud, becoming the first defendant
criminally charged in the case to admit wrongdoing.
Garkusha, who also agreed to cooperate with authorities, admitted
that over a three-month period he used corporate press releases
obtained before they were released publicly to make $125,000 trading
in stocks.
"I am very sorry I did this," Garkusha said in court. "I know that
it was against the law."
Garkusha, a resident of Alpharetta and Cumming, Georgia, near
Atlanta, was arrested in August along with four other individuals in
what authorities said was the first criminal case over a securities
fraud scheme involving hacked inside information.
Prosecutors said Garkusha, 47, who was born in Russia and is a U.S.
citizen, was among a group of traders who executed securities
transactions based on inside information stolen by hackers in
Ukraine.
Nine people were subsequently indicted and 34 defendants were named
in a lawsuit by U.S. securities regulators for engaging in a scheme
to steal over 150,000 press releases from Business Wire, Marketwired
and PR Newswire before the news became public.
Business Wire is a unit of Warren Buffett's Berkshire Hathaway Inc.
Britain's UBM Plc last week announced it would sell PR Newswire to
Cision for $841 million.
The U.S. Securities and Exchange Commission said the long-running
scheme enabled the defendants to make over $100 million. The more
narrowly focused criminal case against Garkusha alleged that he and
his co-defendants earned $30 million.
[to top of second column] |
Garkusha had been an executive vice president at Alpharetta,
Georgia-based APD Developers Inc, which designed and built
residential communities and condominiums.
As part of his plea, Garkusha agreed to forfeit his $125,000 in
profits. His sentencing is scheduled for May 6.
Charges remain pending against four other defendants arrested in
August on indictments filed in Brooklyn and Newark, New Jersey:
Arkadiy Dubovoy, Igor Dubovoy, Leonid Momotok and Vitaly Korchevsky.
Those four have pleaded not guilty. The Dubovoys are scheduled to
face trial on Oct. 3.
The case is U.S. v. Korchevsky et al, U.S. District Court, Eastern
District of New York, No. 00381.
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
