Trader pleads not guilty in US$100 million hacking case in US

A man charged over his alleged role in a more than US$100 million insider trading scheme that involved hacking into networks that distribute corporate news releases pleaded not guilty on Wednesday.

Arkadiy Dubovoy, who spoke Russian and used an interpreter, entered his plea to securities fraud, wire fraud and conspiracy charges in a brief appearance before US District Judge Madeline Cox Arleo in Newark, New Jersey. A November 4 trial date was set. Dubovoy's son, Igor, appeared separately on related charges before US Magistrate Judge Cathy Waldor, also in Newark, on Wednesday, and is expected to enter a formal plea at a September 14 arraignment.

Michael Critchley, a lawyer for Arkadiy Dubovoy, declined to comment. Lawrence Lustberg, a lawyer for Igor Dubovoy, said he hoped within a few days to conclude talks that would allow his client to be released on bail.

The Dubovoys were among 32 defendants, including traders and hackers, charged last month by US authorities over an alleged five-year scheme to steal more than 150,000 press releases from Business Wire, Marketwired and PR Newswire before the news became public.

Nine of the defendants were criminally charged, including seven who prosecutors said were traders and two who were said to be hackers. The Dubovoys were two of the traders.

Five of the nine were arrested in the United States, and four were at large in Ukraine.

Prosecutors said traders gave hackers "shopping lists" of press releases they wanted to peek at in advance and then executed trades before more than 800 of the stolen releases were made public.

Arkadiy Dubovoy was among the more successful traders, accounting for more than US$11 million of illegal profit through trades in companies such as Align Technology and Caterpillar, prosecutors said.

Another trader, Morgan Stanley alumnus and hedge fund manager Vitaly Korchevsky, made more than US$17 million of illegal profit, prosecutors said. A federal judge in Brooklyn, New York, on August 26 ordered Korchevsky's release on US$2 million bond.

The US SEC said the conspiracy included traders in New York, Cyprus, France, Malta and Russia. Business Wire is a unit of Warren Buffett's Berkshire Hathaway Inc, and PR Newswire is a unit of Britain's UBM Plc.

This article appeared in the South China Morning Post print edition as: Trader pleads not guilty to hacking

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