The US Securities and Exchange Commission has made Ukrainian-based Jaspen Capital Partners Limited and CEO Andriy Supranonok pay $30 million to settle allegations that they profited from trading on non-public corporate information hacked from newswire services.

The SEC announced charges last month against 34 defendants. Allegedly, two of the men hacked into newswire services and transmitted the stolen data to a web of international traders, including Jaspen and Supranonok. By getting an early look at the information before its public release, the traders allegedly generated more than $100 million of illegal profits over a five-year period. The case was filed in US District Court for the District of New Jersey, which entered an asset freeze and other emergency relief against Jaspen and Supranonok, among others.    

The SEC says that the settlement shows that even foreigners in faraway countries who trade on stolen non-public information and use complex instruments in an attempt to avoid detection are not safe from its gaze.

The SEC says that Jaspen and Supranonok bought and sold contracts for differences using information from the hacked press releases. By means of such a derivative, A sells B something but B does not pay him. Instead, B pays A the difference between today's price and the price at contract time. If the price goes down, B pays A the difference.

Jaspen and Supranonok agreed to return $30 million of allegedly ill-gotten gains. The settlement offers are subject to approval by the court. This case should serve as a shot across the bow of any trader who thinks that CFDs traded outside the United States can be used to mask their thievery. The SEC’s litigation continues against the remaining 32 defendants charged in the case.