y FILEDUNDERSEAL INTHEUNITED STATESDISTRICTCOURT FORTHEDISTRICTOF NEW JERSEY;r s[UNDERSEAL],ZJ); !0Aq: IINo. 15 Civ.PLAINTIFF,FILEDUNDERSEALv.[UNDERSEAL],DEFENDANTSCOMPLAINT Counsel of Record: David Axelrod Kelly Gibson John Donnelly Securities and Exchange Commission Philadelphia RegionalOffice One Penn Center 1617 JFK Boulevard, Suite 520 Philadelphia, P A19103 Telephone: (215)597-3100 Facsimile: (215)597-2740 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. ARKADIY DUBOVOY, IGOR DUBOVOY, PAVEL DUBOVOY, NELIA DUBOVA, DAVID AMARYAN, ALEXANDER FEDOSEEV, ALEKSANDR GARKUSHA, OLEKSANDER IEREMENKO ( a.k.a.Aleksander Eremenko ), VLADISLAV KHALUPSKY, VITAL Y KORCHEVSKY, ROMAN LAVLINSKIY, OLEKSANDR MAKAROV, LEONID MOMOTOK,NIKOLAI SLEPENKOV,ANDRIY SUPRANONOK, IV AN TURCHYNOV, MAXIM ZAKHARCHENKO, APD DEVELOPERS, LLC, BERATTO GROUP LTD., BERING EXPLORER FUND LTD., CONCORDE BERMUDA LTD., ESCADA LOGISTICS LTD., EXANTE LTD., GLOBAL HEDGE CAPITAL GROUP, GUIBOR S.A., INTERTRADE PACIFIC S.A., MEMELLAND INVESTMENTS LTD., JASPEN CAPITAL PARTNERS LIMITED, NTS CAPITAL FUND, OCEAN PRIME INC., OMEGA 26 INVESTMENTS LTD., and SOUTHEASTERN HOLDING AND INVESTMENT COMPANY LLC, Defendants. Case No. COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED PlaintiffSecuritiesandExchangeCommission(the"Commission"),OnePennCenter,1617JFKBoulevard,Suite520,Philadelphia,Pennsylvania19103,allegesasfollowsagainstthefollowingdefendants,whosenamesandlastknownaddressesaresetforthbelow:a.ArkadiyDubovoy3374CedarFarmsCt.Alpharetta,GA30004b.IgorDubovoy6240CrestedMossDr.Alpharetta,GA30004c.PavelDubovoy3374CedarFarmsCt.Alpharetta,GA30004d.DavidAmaryanAkademichaskayaB. Street,House15, 1,255Moscow,Russia125130e.NeliaDubovaULMarseljskaya32/2-1Odessa,Ukrainef.AlexanderFedoseevHolzunova40GVoronezh,Russia394068g.AleksandrGarkusha4090AshevilleManorCourtCumming,GA30040h.OleksanderIeremenko(a.k.a. AleksanderEremenko)[Streetaddressunknown]Kiev,Ukraine1.VladislavKhalupsky2ArmeyskayaStreetApt.23Odessa, UkraineJ.VitalyKorchevsky21709SlittingMillRoad GlennMills,PA 19342 k.RomanLavlinskiySvobody, 10-26VoronezhVoronezhskaiy,Russia1. OleksandrMakarovSaksahanskoho92, 18Kiev,Ukrainem.LeonidMomotok1610PepperbushCourtSuwannee,GA20024n. Nikolai(Nikolay)Slepenkov4,SevanskayaStreet,Apt. 420Moscow,Russiao. AndriySupranonok7bL. UkrainkyBoulevard,Apt.51Kiev,Ukraine,01001p. IvanTurchynov[Streetaddressunknown]Kiev,Ukraineq. MaximZakharchenkoBeringCapitalPartnersLtd4thFloor15 PozharbkyPereulokMoscow,Russia119034r.APDDevelopers,LLC6495 ShilohRoad,Suite400Alpharetta,GA300Q5s. BerattoGroupLtd.Genevaplace,WaterfrontDriveRoadtown,TortolaBVIt. BeringExplorerFundLtd.34th Floor 15 PozharbkyPereulok Moscow,Russia119034 u. ConcordeBermudaLtd.2MechnykovaStr.Kiev,Ukraine01601v. EscadaLogisticsLtd.4, SevanskayaStreet,APT.420Moscow,Russia115516w. ExanteLtd.PortomasoBusinessTower,Level7St. Julians,Maltax. GlobalHedgeCapitalGroupBolshoySavvisky11Moscow,Russia119435y. GuiborS.A..2RueAlfreddeVignyParis,France75008z. IntertradePacificS.A.AkademichaskayaB.Street,House 15, 1, 255Moscow,Russia125130aa. JaspenCapitalPartnersLimitedSchorsa,32G, 1stfloorKiev,Ukraine,01001bb.NTSCapitalFund1709SlittingMillRoadGlennMills,PA19342cc. MemellandInvestmentsLtd.2,ChristakikaiElpinikisKinniFlat8, SummerGardens,Limassol4046,Cyprusdd. OceanPrimeInc.16SadovnicheskayaSt.Moscow,Russia115035ee. Omega26 InvestmentsLtd.4 2RueAlfreddeVigny Paris,France75008 ff. SoutheasternHoldingandInvestmentCompanyLLC 3421 PrestonPointeWay Cumming,GA30041 SUMMARY 1. Defendantsperpetratedaninternationalfraudulentschemebyhackingthecomputerserversofatleasttwonewswireservicesandstealing,throughdeception,confidentialearningsinformationfornumerouspublicly-tradedcompaniesfrompressreleasesthathadnotyetbeenreleasedtothepublic. Defendantsthenusedthatstolenmaterialnonpublicinformationtotradesecuritiesandreapover$100millioninunlawfulprofits.2. Overanapproximatelyfive-yearperiod,defendantsIvanTurchynovandOleksanderIeremenko-computerhackersresidingintheUkraine(the"hackerdefendants")-hackedintocertainU.S. newswireservicesand,throughdeception,stolemorethan100,000pressreleasesforpublicly-tradedcompaniesbeforetheywereissuedtothepublic. Manyof thestolenpressreleasescontainedinformationaboutquarterlyandannualearningsdataforthesecompanies.3. Thehackerdefendantsworkedinconcertwithanetworkoftraders,locatedintheUnitedStatesandabroad,whopaidthehackerdefendantsforthestoleninformation,eitherthroughaflatfeeorapercentageof theillicitprofitsgainedfromtheillegaltradingontheinformation.4. Thehackerdefendantsoscillatedprimarilybetweentwonewswireservices,focusingonobtainingthepressreleasesfromoneortheotherdependingonthehackerdefendants' accesstothenewswireservices' computernetworks.5 5. Thehackerdefendantsstolethepressreleasesandpassedthemtothetraderdefendantsinthewindowoftimebetweenwhenthepressreleaseswereuploadedtothenewswireservice'ssystemandwhenthepressreleaseswerepubliclyissued. Asaresult,thetraderdefendantshadanunfairtradingadvantageoverothermarketparticipantsbecausetheyknewthecontentofthepressreleasesbeforethatinformationwaspubliclyannounced.6. Thedefendanttraderscapitalizedonthisadvantagebyinitiatingtradesbeforethepressreleaseswereissuedtothepublic. Thedefendanttradersboughtorsoldsecuritiesdependingontheiranticipationof howthemarketwouldrespondtotheinformationinthestolenpressreleases.7. Thetradersuseddeceptivemeanstoconcealtheiraccessthestolenreleasesandmakepaymentstothehackers. Thetradersalsoconcealedtheirtradingactivitiesthroughuseofmultipleaccountsandentities.8. Then,afterthepressreleasewaspubliclyissued,andthepriceofthesecuritieschangedasthemarketlearnedthepreviouslyundisclosedinformation,thedefendanttradersreapedenormousprofits.9. Collectively,thetraderdefendantsusedthisstoleninformationtorealizeover$100millioninillicitgains.10. Oninformationandbelief,atleastsomeofthedefendantshavecontinuedtopursuethisschemeatoneormorenewswireservices. AsrecentlyasMay2015,someof thedefendantstradedinfrontof pressreleasesissuedfrom athirdnewswireservicethathadbeenhacked.11. ByknowinglyorrecklesslyengagingintheconductdescribedinthisComplaint,defendantsviolated,andunlessenjoined,willcontinuetoviolatethesecuritieslaws.6 JURISDICTIONANDVENUE 12. TheCommissionbringsthisactionpursuantto Section20(b)oftheSecuritiesAct[15U.S.C. 77t(b)and 15 U.S.C. 77t(e)]andSections21(d)and21AoftheExchangeAct[15 U.S.C. 78u(d)and78u-l]toenjoinsuchtransactions,acts,practices,andcoursesofbusiness,andtoobtaindisgorgement,prejudgmentinterest,civilmoneypenalties,andsuchotherandfurtherreliefastheCourtmaydeemjustandappropriate.13. ThisCourthasjurisdictionoverthisactionpursuantto Sections20(b)and22(a)of theSecuritiesAct[15 U.S.C. 77t(b)and77v(a)] andSections21(d),21(e),21Aand27oftheExchangeAct[15U.S.C. 78u(d),78u(e),78u-1 and78aa].14. VenueinthisDistrictisproperpursuanttoSection22(a)oftheSecuritiesAct[15U.S.C. 77v(a)] andSection27oftheExchangeAct[15 U.S.C. 78aa]. Certainofthetransactions,acts,practices,andcoursesof businessconstitutingtheviolationsallegedhereinoccurredwithintheDistrictofNewJerseyandelsewhere,andwereeffected,directlyorindirectly,bymakinguseofthemeansorinstrumentsorinstrumentalitiesof transportationorcommunicationininterstatecommerce,orofthemails,orthefacilitiesof anationalsecuritiesexchange. Forexample,duringtherelevanttimeperiod,NewswireService2'scomputerservers,whichwerehackedinconnectionwiththescheme,werelocatedinJerseyCity,NewJerseyandPiscataway,NewJersey. Inaddition,securitiestransactionsrelatedtothismatterwereexecutedonNASDAQserversinCarteret,NewJerseyandbybrokerdealersinJerseyCity,NewJersey.7 DEFENDANTS I. The Hacker Defendants 15. Oleksandr Ieremenko, a.k.a. Aleksander Eremenko, ("Ieremenko") is23yearsoldandresidesinKiev,Ukraine.16. Ivan Turchynov ("Turchynov") is27yearsoldandresidesinKiev,Ukraine.17. ThehackerdefendantsperpetratedtheschemefrommultipleIPaddresses,includingbutnotlimitedto: XX:XXXX:-18.42; X:XXX:X-9.101;XX:XXXX:-136.6; andXX:XXXX:-26.98.18. To concealtheirtrueidentities,thehackerdefendantsusedmultipleemailaccountsandonline"handles"incarryingoutandcommunicatingaboutthescheme. Totheextentreferencedinthecomplaint,otherdocumentsfiledwiththeCourt,orexhibits,theseuniquehandlesandaliaseswillberedacted. Theywillbereplacedwiththehackerdefendant'snamefollowedby"Alias"(i.e.,"IeremenkoAlias").II. The Trader Defendants A.The Dubovoy Group Defendants 19. TheDubovoyGroupdefendantsareaclose-knitgroupoftraders,consistingprimarilyoffamily,friends, andbusinessassociatesof ArkadiyDubovoy. Collectively,the.DubovoyGroupdefendantsrealizedover$31 millioninillicitgainsfromthescheme.20. Aspartofthisscheme,theDubovoyGroupdefendantsopenedtradingaccountsintheirnames,namesofcompaniestheyowned,andinthenamesof atleastfourof theirassociates("StrawOwners").8 a. StrawOwner1isthemanagerof UkrainianicecreamcompanyownedbyArkadiyDubovoy,whohadstrawownershipforaccountsatInteractiveBrokersendingin*4463,Cimbanqueendingin*COli,andTradestationendingin*7799.b.StrawOwner2isthebrotherof defendantLeonidMomotok,andhadstrawownershipforaccountsatE*Tradeendingin*0592,TDAmericaendingin*2779,CharlesSchwabendingin*3160.c.StrawOwner3isthemanageroftheUkrainianbranchof oneofArkadiyDubovoy'scompanies,R.J. Construction,andhadstrawownershipforInteractiveBrokersaccountendingin*8348.d.StrawOwner4isanothermanagerof theUkranianbranchofRJConstruction,andhadstrawownershipoflnteractiveBrokersaccountendingin*8944,CharlesSchwabaccountendingin*0875,andBankof Americaaccountendingin*9456.21. Arkadiy Dubovoy ("Arkadiy Dubovoy") is50yearsoldandresidesinAlpharetta,Georgia. Heistheownerorpartialownerofseverallimitedliabilitycorporationsostensiblyinvolvedintheconstructionbusiness,includingdefendantsAPDDevelopersLLCandSoutheasternHoldingandInvestmentCompanyLLC. HealsoownsBoniInc.whichispurportedlyinthebrokerageservicesbusiness. Thefollowingbrokerageaccounts,openedinthenameof ArkadiyDubovoyorinthenameof entitiesheowns,wereinvolvedintheschemeandtradinginthoseaccountsgeneratedover$11 millioninill-gottengains: OptionsHouseaccountendingin*8957;TradeKingaccountendingin*8312;CharlesSchwabaccountsendingin*0365and*8834;E*Tradeaccountendingin*6987;Fidelityaccountendingin*6216;MerrillLynchaccountendingin*9078;Scottradeaccountendingin*0584;TDAmeritradeaccountsendingin*7954and *4751.922. Igor Dubovoy ("Igor Dubovoy") is28yearsoldandisArkadiyDubovoy'sson.HeresidesinAlpharetta,Georgia. HeownsDawson&Dawson("Dawson")andM&IAdvisingInc.("M&IAdvising"),andassistsArkadiyDubovoyinoperatingBoniInc.,anentityusedtotransferfunds betweenbrokerageaccounts. AccountsinthenameofM&IAdvising(TDArneritradeaccountending*7757)andDawson(TDAmeritradeaccountending*3311)wereinvolvedinthescheme. Approximately$250,000inillicitgainsweregeneratedintheseaccounts. IgorDubovoyalsohadtradingauthorityonand/ormanagedseveralofArkadiy' Dubovoy'sbrokerageaccountsinvolvedinthescheme,including: TDArneritradeaccountsendingin*4751 and*7954,andCharlesSchwabaccountending*0365. IgorDubovoygavePowerof AttorneytoLeonidMomotoktotradeintheaccountswithrespecttowhichIgorDubovoywasassociated.23. Pavel Dubovoy ("Pavel Dubovoy") is32yearoldandresidesinKiev, UkraineandAlpharetta,Georgia. HesharesacreditcardaccountwithArkadiyDubovoy. Duringthescheme,PavelDubovoytoldotherDubovoyGroupdefendants,includingAleksandrGarkusha,howto accessthepressreleasesthehackerdefendantsstole. HealsodirectedpaymentstoTurchynovusingaDubovoyentityandconfirmedthosepaymentswithArkadiyDubovoy.Usingoneormoreintermediaries,PavelDubovoyalsocommunicatedwiththehackerdefendantsand,inatleastoneinstance,toldthemwhichpressreleasesto unlawfullyacquire.24. Nelia Dubova ("Dubova") is38yearsoldandresidesinOdessa,Ukraine. Sheownedabrokerageaccountusedinthescheme(APXaccountendingin*4899)andshewasthesignatoryofficerforanotheraccountinvolvedintheschemeinthenameofdefendantBerattoGroup(APXaccountendingin*5038). KhalupskyandIgorDubovoypossessedtheloginand10 password information for the Beratto APX *5038 account.The Dubovoy Group defendants used these two accounts to make illicit trades resulting in approximately $1million in ill-gotten gains. 25.Aleksandr Garkusha ("Garkusha") is 47 years old and resides in Cumming, Georgia.He is the executive vice president of defendant APD Developers, which is owned by Arkadiy Dubovoy.He also manages the trading operations ofTanigold Assets, an entity which was used by Pavel Dubovoy to make payments to Turchynov.In addition, Garkusha was the former principal at Verum Capital Group LLC which was located at the same address as APD Developers in Georgia. 26.Vladislav Khalupsky ("Khalupsky") is 44 years old and resides in Brooklyn, New York, and Odessa, Ukraine.Khalupsky worked in the securities industry as a registered representative until June 2011.Along with Igor Dubovoy, Korchevsky, and Garkusha, Khalupsky helped the Dubovoy Group set up off-shore accounts.He assisted Arkadiy and Igor Dubovoy in wiring money.He directed the configuration of one Arkadiy Dubovoy's brokerage accounts involved in the illegal scheme (Merrill Lynch account ending *9078) (an account he referred toin a conversation with Arkadiy Dubovoy as "our account") and helped todirect the Dubovoy' s trading in other accounts. He made or directed illicit trades in those accounts in connection with the scheme alleged in this Complaint. 27.Vitaly Korchevsky ("Korchevsky") is49 years old and resides in Glen Mills, Pennsylvania.Korchevsky was a registered investment adviser who previously established and managed hedge funds.He has partnered with Arkadiy Dubovoy in various enterprises, including hedge funds.Korchevsky coordinated his illegal trading with Arkadiy Dubovoy and other members ofthe Dubovoy Group and used the following brokerage accounts to make unlawful trades:E*Trade account ending 6623; Fidelity account ending *4716; and TD Ameritrade 11 accountsending*2449and*1014. Alongwithhiswife,KorchevskyownsdefendantNTSCapitalFundL.P.,whichalsotradedinconnectionwiththisscheme. Korchevskymademorethan600unlawfultradesaspartof thescheme,realizingapproximately$17.5millionin ill-gottengains.28. Leonid Momotok ("Momotok") is47yearsoldandresidesinCumming,Georgia. Heownsaone-percentinterestintwoof ArkadiyDubovoy'scompanies,RJGeneralMaintenanceLLCanddefendantSoutheasternHoldingandInvestmentCompanyLLC.Momotokisalsothemanagingmemberof defendantSoutheasternHolding. MomotokhadacomprehensiveroleintheschemedescribedinthisComplaint. HeadvisedArkadiyDubovoyhowtotradeusingthestoleninformation,andhehadformal tradingauthorityforbrokerageaccountsusedintheschemebutheldinthenameof othermembersof theDubovoyGroup,including: ArkadiyDubovoy'sScottradeaccountending*0584; SoutheasternHolding'sScottradeaccountending*5408,CharlesSchwabaccountending*3154,andTDAmericaaccountending*6350. MomotokalsousedaccountsheldbyIgorDubovoyandStrawOwners 1,2,3,and4totradeinthisscheme.29. APD Developers, LLC ("APD") purportstobeaconstructionbusinessbasedinAtlanta,Georgia. ArkadiyDubovoyownsAPDandopenedbrokerageaccountsinthenameofAPDthatwereusedtinthefraudulentscheme,includingTDAmeritradeaccountsending*4751and*7954andCharlesSchwabaccountending*0365.30. Beratto Group LLC ("Beratto") purportstobearealestateandinvestmentcompanybasedintheBritishVirginIslands. BerattoownedanAPXaccountending*5038.Dubova,KhalupskyandIgorDubovoyhadaccesstothisaccountanditwasusedtomakeillicittradesinconnectionwiththefraudulentscheme.12 31. , NTS Capital Fund L.P. ("NTS") purportstobeahedgefundbasedinGlenMills,Pennsylvania,ownedbyKorchevskyandhiswife. NTShasabrokerageaccountatJeffries/JPMorganendingin*0336. Unlawfultradesweremadeinthisaccountresultinginapproximately$3.2millioninill-gottengains.32. Southeastern Holding and Investment Company LLC ("Southeastern") isaGeorgialimitedliabilitycorporationwithitsprincipalplaceof businessinCumming,Georgia.ItsmanagingmembersareArkadiyDubovoyandMomotok. Southeasternhadthefollowingbrokerageaccounts,CharlesSchwabaccountending*3154,andTDAmeritradeaccountending*6350. Illicittradesweremadeintheseaccountsaspartof theschemeresultinginapproximately$165,000inill-gottengains.B.The Foreign Trader Defendants 33. David Amaryan ("Amaryan") is35yearsoldandresidesinMoscow,RussianFederation. HeistheCEOof defendantOceanPrimeInc. ("OceanPrime")andthesoledirectorof defendantIntertradePacificS.A.,("Intertrade"). OceanPrimeandIntertradepurporttobeproprietarytradingfunds. AmaryanopenedaccountsforOceanPrime(InteractiveBrokersaccountending*9827)andIntertrade(InteractiveBrokersaccountending*8284). IllicittradesbasedonstolenpressreleasesweremadeintheOceanPrimeandIntertradeaccountsresultinginapproximately$3.7millioninill-gottengains. Asdescribedbelow,AmaryananddefendantNikolaiSlepenkov,whoownsdefendantEscadaLogistics,oftenmadeillicittradesinthesamesecurities,onthearnedaysandaroundthesametimeand,frequently,viathesameIPaddresses.34. Ocean Prime Inc. ("Ocean Prime") purportstobeaproprietarytradingfundestablishedintheBritishVirginIslandswithitsprincipalplaceof businessinMoscow,RussianFederation.13 35. Intertrade Pacific S.A.("Intertrade") purportstobeaproprietarytradingfundestablishedintheBritishVirginIslandswithitsprincipalplaceof businessinMoscow,RussianFederation. Amaryanistheownerandsoledirectorofthefund. Intertrade'saddressisthesameasAmaryan'shomeaddressinMoscow.36. Nikolai Slepenkov ("Siepenkov") is46yearsoldandresidesinMoscow,RussianFederation. HeistheCEOandownerof defendantEscadaLogisticsLtd.,whichpurportstobeaproprietarytradingfund. HehasanaccountatInteractiveBrokersending*6218. Inconnectionwiththefraudulentscheme,heexecutedillicittradesinthataccountresultinginapproximately$1.25millioninill-gottengains,ofteninthesamesecurities,onthesamedays,closetothesametimesandfrequentlyviathesameIPaddressesasOceanPrime,IntertradeandEscada.37. Escada Logistics Ltd. ("Escada") purportstobeaproprietarytradingfundestablishedintheBritishVirginIslandswithitsprincipalplaceofbusinessinMoscow,RussianFederation. SlepenkovrunsEscadaoutof hisapartmentinMoscowandopenedanaccountinthenameof EscadaatInteractiveBrokers(ending*2806),whichheusedtoexecuteunlawfultradesresultinginapproximately$850,000inill-gottengains.38. Alexander Fedoseev ("Fedoseev") is29 yearsoldandresidesinVoronezh,RussianFederation,thesametownasdefendantRomanLavlinskiy. FedoseevownsInteractiveBrokersaccountending*4148,whichheusedto makeunlawfultradesinthataccountresultinginapproximately$700,000inill-gottengains. Inthebrokerageaccountstheycontrolled,FedoseevandLavlinskiyoftentradedbasedonstolenpressreleasesinthesamesecurities,onthesamedays,closetothesametimesandfrequentlyviathesameIPaddresses.14 39. Roman Lavlinskiy ("Lavlinskiy") is29yearsoldandresidesinVoronezh,RussianFederation. LavlinskiyownsorownedInteractiveBrokersaccountending*7182andTDAmeritradeaccountsending*3933 and*9065,whichheusedinconnectionwiththefraudulentschemetomakeunlawfultradesresultinginover$400,000inill-gottengains.Lavlinskiy'sillicittradeswereoftenmadeinthesamesecurities,onthesamedays,closetothesametimesandfrequentlyviathesameIPaddressesasFedoseev.40. Oleksandr Makarov ("Makarov") is32yearsoldandresidesinKiev,Ukraine.Previously,heworkedinthefinancial servicesindustryforvariousinvestmentcompanies,includingPhoenixCapital. HehasabrokerageaccountatInteractiveBrokersending*4548andasub-accountending*4548F. Inconnectionwiththefraudulentscheme,Makarovexecutedillicittradesinhisaccountresultinginapproximately$80,000inill-gottengains. Hisillicittradeswereoftenmadeinthesamesecurities,onthesamedaysandclosetothesametimes,andofte_nthroughthesameIPaddressesasDefendantConcordeBermudaLtd.41. Concorde Bermuda Ltd. ("Concorde") purportstobeahedgefundestablishedinBermudawithitsprincipalplaceof businessinKiev,Ukraine. ConcordehasproprietarytradingaccountsatInteractiveBrokersending*4237,*1358,and*2720,whichwereusedinconnectionwiththefraudulentscheme,resultinginapproximately$3.6millioninill-gottengains. Thosetradeswereoftenmadeinthesamesecurities,onthesamedaysandclosetothesametimes,andoftenthroughthesameIPaddressesasdefendantMakarov. Inaddition,ConcordetransferredmoneytodefendantJaspenCapitalPartners.42. Exante Ltd. ("Exante") purportsto beaMalta-basedhedgefund. ExanteholdsproprietarytradingaccountsatInteractiveBrokers(ending*2751)andatLekSecurities,whichwereusedinconnectionwiththefraudulentschemetomaketradesresultinginapproximately15 $24.5millioninill-gottengains. SeveralofExante'sdirectorsarealsoownersofdefendantGlobalHedgeCapitalFundLtd.,andthetwoentitiesshareemployees. ExanteandGlobalHedgefrequentlymadeillicittradesinthesamesecurities,onthesamedaysandaroundthesametime,andoftenthroughthesameIP addresses.43. Global Hedge Capital Fund Ltd. ("Global Hedge") purportstobeaCaymanIslands-basedhedgefundwithitsprincipalplaceof businessinMoscow,RussianFederation.Severalof itsownersaredirectorsof Exanteandthetwoentitiesshareemployees. GlobalHedgehasaproprietarytradingaccountatInteractiveBrokersending*4444. Inconnectionwiththefraudulentscheme,GlobalHedgeexecutedunlawfultradesinthataccountresultinginover$3.8millioninill-gottengains,ofteninthesamesecurities,onthesamedaysandclosetothesametimes,andoftenthroughthesameIPaddressesasExante.44. Memelland Investments Ltd. ("Memelland") purportstobeahedgefundestablishedintheBritishVirginIslandswithitsprincipalplaceof businessinLimassol,Cyprus.MeinellandhasatradingaccountatInteractiveBrokersending*2799,whichwasusedin connectionwiththefraudulentschemetomakeillicittrades,realizingprofitsofapproximately$375,000.45. Guibor S.A.("Guibor") purportstobeaproprietarytradingfundestablishedinFrancewithitsprincipalplaceof businessinParis,France. ItsharesabusinessaddressandanownerwithdefendantOmega26InvestmentsLtd. GuiborhasaproprietarytradingaccountatInteractiveBrokersending*2450,whichwasusedinconnectionwiththefraudulentschemetoexecutetradesresultingin$3.5millioninill-gottengains. GuiborandOmega26 frequently tradedinthesamesecurities,onthesamedaysandclosetothesametimes,andoftenthroughthesameIPaddresses.16 46. Omega 26 Investments Ltd. ("Omega 26")purportstobeaproprietarytrading:fimdestablishedinSamoawithitsprincipalplaceof businessinParis,France. Omega26hasproprietarytradingaccountsatInteractivebrokersending*2898whichitusedinconnectionwiththefraudulentschemetoexecutetradesresultinginapproximately$2.1 millioninill-gottengains. Inaddition, Omega26alsohadaproprietarytradingaccountatCantorFitzgeraldending*055,which,oninformationandbelief,itusedto makeunlawfultradesinconnectionwiththeschemeresultinginapproximatelyanother$1 millioninill-gottengains.47. Bering Explorer Fund Ltd. ("Bering") purportstobeaBahamiancompanywithitsprincipalplaceof businessinMoscow,RussianFederation. BeringhadaccountsatCantorFitzgeraldEuropeending*966and*969,whichwereusedinconnectionwiththefraudulentschemetomaketradesresultinginover$6.6millioninill-gottengains.48. Maxim Zakharchenko ("Zakharchenko") residesintheRussianFederation.HeisoneoftwoBeringdirectors,andhadtradingauthorityinBering'sbrokerageaccountsatCantorFitzgeraldEurope. Oninformationandbelief,ZakharchenkodirectedBering'sillicittrades.49. Andriy Supranonok ("Supranonok") is33 yearsoldandresidesinKiev,Ukraine. HeistheCEOandowns30%ofdefendantJaspenCapitalPartners'shares.SupranonokhasanaccountatGFTUKGlobalMarketsLimitedending*1765 andisanauthorizedtraderincertainof Jaspen'sbrokerageaccounts. Previously,SupranonokwasemployedasheadofsalesandtradingatKiev-basedPhoenixCapital,whereMakarovwasalsoemployed.50. Jaspen Capital Partners ("Jaspen") purportstobeaBermudiancompanybasedinKiev,Ukraine. Jaspenalsopurportstobeafull serviceinvestmentbankthatprovides17 advisoryservicesincludingassetmanagementandsalesandtrading. Jaspenhadthefollowingproprietarytradingaccounts: InteractiveBrokersaccountsending*2712and*6768;R.J.O'Brienaccountending*0006;andAJK,Inc. accountsending*0397,*5787,*5796,and*0765;ADMInvestorServicesInternationalLimitedending*CM07,*CM08,and*CM21 (basedinLondon,England);CantorFitzgeraldEuropeending*011,*994(basedinLondon,England);andSaxoBankA/S ending*INETand*NET2(basedinHellerup,Denmark). Inconnectionwiththefraudulentscheme,illicittradeswereplacedinsomeofJaspen'saccountsandSupranonok'saccountresultinginnearly$25millioninill-gottengains.HACKED NEWSWIRE SERVICES 51. NewswireService 1 isanewswireservicebasedinToronto,Canada. It providesend-to-endcontent,newsproduction,anddistributionservicestoitsclients,includingmanyissuersintheUnitedStates.52. NewswireService2isanewswireservicewithheadquartersinNewYork,NewYork. It providesend-to-endcontent,newsproduction,anddistributionservicestoitsclients,includingmanyissuersintheUnitedStates. Throughouttherelevanttimeperiod,NewswireService2'scomputerserverswerelocatedinJerseyCity,NewJerseyandPiscataway,NewJersey. Collectively,NewswireService1andNewswireService2arereferredtohereinasthe"NewswireServices."53. NewswireService3isanewswireservicewithitsheadquartersinNewYorkandCalifornia. Oninformationandbelief,fromatleastDecember2014throughMay2015,atleastsomeof thedefendantsperpetratedthesameschemeagainstNewswireService3,andmayhavetargetedothernewswireservicesaswell.18 TERMSUSEDINTHISCOMPLAINT Options 54. Astockoption,commonlyreferredto asan"option,"givesitspurchaser-holdertheoptiontobuyorsellsharesofanunderlyingstockataspecifiedprice(the"strike"price)priortotheexpirationdate. Optionsare generallysoldin"contracts,"whichgivetheoptionholdertheopportunitytobuyorsell 100sharesofanunderlyingstock.55. A"call"optiongivesthepurchaser-holderofthe.optiontheright, butnottheobligation,topurchaseaspecifiedamountof anunderlyingsecurityataspecifiedstrikepricewithinaspecifictimeperiod. Generally,thebuyerofacalloptionanticipatesthatthepriceoftheunderlyingsecuritywillincreaseduringaspecifiedamountoftime.56. A"put"optiongivestheholderoftheoptiontheright,butnottheobligation,tosellaspecifiedamountofanunderlyingsecurityataspecifiedstrikepricewithinaspecifictimeperiod. Generally,thebuyerof aputoptionanticipatesthatthepriceoftheunderlyingsecuritywilldecreaseduringaspecifiedamountoftime.Short-Selling57. Short-sellingisthesaleof asecuritynotownedbythesellerandisatechniqueusedtotakeadvantageofananticipateddeclineinprice. An investorborrowsstockfordeliveryatthetimeof theshortsale. Ifthesellercanbuythatstocklateratalowerprice,aprofitresults;if,however,thepricerises,alossresults.ContractsforDifferences58. Acontractfordifference("CFD")isastockderivativethatisanagreementbetweentwopartiestoexchangethedifferenceinvalueof anunderlyingstockbetweenthetimethecontractisopenedandthetimeatwhichitisclosed. If thesharepriceincreasesforthe19 underlyingsecurity,thesellerpaysthisdifferencetothebuyer. If,however,theunderlyingsharepricedeclines,thebuyermustpaythesellerthedifference.59. ACFDtypicallymirrorsthemovementandpricingofitsunderlyingstockonadollar-for-dollarbasis,suchthatanyfluctuationinthemarketpriceof theunderlyingsecurityisreflectedintheunrealizedgainorlossoftheCFDposition.60. Generally,theinvestorinaCFDpositionbenefitsbyacquiringthefuturepricemovementof theunderlyingcommonstockwithouthavingtopayforortakeformal ownershipof theunderlyingshares.61. Generally,theinvestorinaCFDisnotrequiredtopayfortheunderlyingsharesofthesecurity. InsteadtheCFDinvestoronlypaysthetransactionfeeschargedbytheCFDprovider. Thus,aCFD,likeastockoption,allowsaninvestortorecognizesignificantvaluefromanunderlyingequity'spricemovementwithouthavingtopayfortheunderlyingshares.Margin 62. "BuyingonMargin"isthepracticeof borrowingmoneytopurchasesecurities.63. Buyingwithborrowedmoneycanbeextremelyriskybecausebothgainsandlossesareamplified. Thatis,whilethepotentialforgreaterprofitexits,thereisacorrespondingpotentialforgreaterlosses. Buyingonmarginalsosubjectsatradertoadditionalcostssuchastheinterestpaymentforuseoftheborrowedmoney.IP Address 64. An "internetprotocoladdress"("IPaddress")isauniquenumberrequiredforonlineactivityconductedbyacomputerorotherdeviceconnectedtotheinternet. Insimpleterms,itislikeareturnaddressonaletter.20 FACTS The Newswire Services Are Repositories For Material Nonpublic Information 65. TheNewswireServiceseditedandreleasedpressreleasesforpublicly-tradedcompanies(alsoknownas"issuers")intheUnitedStates. Oftenthesepressreleasescontainedquarterlyearningsdataandotherimportantfinancial informationforagivenissuer. UntiltheNewswireServicesreleasedthepressreleasetothegeneralpublic,thesensitivefinancialinformationin thepressreleasesconstitutedmaterialnon-publicinformation.66. To facilitatetheprocessofdisseminatingquarterlyearningsinformationtothepublic,issuersroutinelyprovideddraftpressreleasestotheNewswireServices. TheNewswireServicesthenedited,prepared,andstoredelectronicallythepressreleaseforpublicdissemination.67. Inprovidingtheseservices,theNewswireServicesbecomerepositoriesformaterialnon-publicinformationfromtheirissuer-clients. From2010throughearly2014,theNewswireServicesissuedmorethanonemillionpressreleasesonbehalfof theirclients. Manyof thesereleasesrelatedtoissuerearningsannouncements. Thepublicationofquarterlyearningsinformationoftenhasasignificantpositiveornegativeshort-termeffectonagivenissuer'ssharepnce.68. Foreachpressrelease,thereisawindowoftimebetweenwhentheissuerprovidesadraftpressreleasetotheNewswireServiceandwhentheNewswireServicepublishestherelease(the"window"). Thiswindowvariedbetweenanumberof minutesandanumberofdays.21 The Hacker Defendants Fraudulently Accessed Unpublished Press Releases From Newswire Service 1 and Newswire Service 2 69. DefendantstookadvantageofthewindowbyhackingintotheNewswireServices'computersystems,accessingthepressreleasespriortotheirpublication,andthentradingonthematerial,non-publicinformationcontainedinthereleasesbeforetheinformationwaspublishedtotheinvestingpublic. Afterthepressreleasewaspubliclyissued,defendantsthenclosedthetradingpositiontheyhadopenedduringthewindowoftimebetweentheuploadofthepressreleaseanditspublicdissemination.70. From2010until2014,thehackerdefendantselectronicallyintruded("hacked"),withoutauthorization,intotheNewswireServices'computersystemsandstoleover100,000pressreleasesbeforetheywerepubliclyissued.71. ThehackerdefendantsuseddeceptivemeanstogainunauthorizedaccesstotheNewswireServices'computersystems,usingtacticssuchas: (a)employingstolenusername/passwordinformationof authorizeduserstoposeasauthorizedusers; (b)deployingmaliciouscomputercodedesignedtodeleteevidenceof thecomputerattacks; (c)concealingtheidentityandlocationof thecomputersusedto accesstheNewswireServices'computers;and(d)usingback-dooraccess-modules.72. Thehackerdefendants' theftofun-publishedpressreleasesoscillatedbetweenthetwoNewswireServicesdependingontheirabilityto gainaccesstotheNewswireServices'servers. ThefollowingchartindicatesthetimeperiodsduringwhichthehackerdefendantswerefocusingonthedifferentNewswireServices:22 Date RangeN ewswire Service 1Newswire Service 2 February2010toJuly2010 Hackershadaccesstonetworkandpressreleases.Limitedaccesstothenetwork.July2010toJanuary2011 Hackershadaccesstonetwork?ndpressreleases.HackershadaccesstonetworkandpressreleasesJanuary2011 toJuly2011 Hackershadaccesstonetworkandpressreleases.ChangeinNewswireService2'scomputersystemblockedaccess.July2011 toMarch2012 Hackershadaccesstonetworkandpressreleases.Hackershadaccesstonetworkandpressreleases.March2012toJanuary2013Hackershadaccesstonetworkandpressreleases.ChangeinNewswireService2'scomputersystemblockedaccess.January2013 toMarch2013Hackershadaccesstonetworkandpressreleases.Hackershadaccesstonetworkandpressreleases.March2013toNovember2013Hackershadaccesstonetworkandpressreleases.ChangeinNewswireService2' scomputersystemblockedaccess.November2013toPresent ChangeinNewswireService 1'scomputersystemblockedaccess.ContinuedattemptsbyhackerstoaccessthenetworkContinuedattemptsbyhackerstoaccessthenetwork73. TheTraderDefendants'tradingactivitymirroredtheaccessandfocusof thehackerdefendants. WhenthehackerdefendantsstolepressreleasesfromNewswireService 1,thetraderdefendantstradedinthesecuritiesof theissuerswhosepressreleaseswerestolenfromNewswireService 1. WhenthehackerdefendantsstolepressreleasesfromNewswireService2,thetraderdefendantstradedinthesecuritiesof issuerswhosepressreleaseswerestolenfromNewswireService2.23 TheStolenPressReleasesGaveTheDefendantsAnIllegalTradingAdvantage74. Throughoutthisscheme,thehackingdefendantsstolemorethan100,000pressreleasesbeforetheywerepubliclyissued. Manyofthestolenpressreleasesincludedcorporateearningsresultsand,often,forecastedfuture earnings.75. It iscommonforfinancialanalysisfirmstoestimateorpredictagivenissuer'squarterlyorannualearnings. The"market"reachesaconsensusexpectationbasedonthesedifferentpredictions. Whenanissuerreleasesitsearnings,thesharepriceforthatissuergenerallyincreasesifitsearningsexceedthemarketconsensusandgenerallydecreasesifitsearningsfall shortof theconsensusprediction. Accordingly,thestolenpressreleasescontainedmaterialinformationthatatradercouldusetoplacesecuritiestradesandreapillicitprofits.TheHackerDefendantsDistributedTheStolenInformation ToTradersInExchangeForAPercentageOf TheirProfitsOrAFlatFee 76. ThehackerdefendantsjoinedwiththetradingdefendantstoprofitonthematerialnonpublicinformationtheystolethroughtheirdeceptivehacksontheNewswireServices. ThehackersdistributedvideoevidenceoftheirabilitytostealinformationfromtheNewswireServices. OnOctober25,2010,Turchynovattachedavideofileto anoutgoingemailmessage.Thisvideoshowsacomputerscreenlistingmorethan300files, manycontainingtheterm"release"inthefilename. AtextwindowthenpopsupwithamessageinRussian,explainingthatwhatappearsonthescreenisanadministrativepanelforfilesandexplaininghowtodownloadthefiles. Themessageconcludesthataccessdatawillbesentto theemailtheviewerprovides.77. Asthevideocontinues,itshowstenfilesbeingselectedanddownloadedto azipfile datedOctober24,2010. ThevideofurthershowsthattheIPaddressusedtodownloadthefileswas:XXXXX:X-26.98.24 78. NewswireService2'sserverlogsconfirmthatitsserverswereunlawfullyaccessedonOctober24,2010-thedateof thezipfileintheTurchynovvideo. NewswireService2'slogsalsoconfirmthat,onOctober24,2010,thetenfiles intheTurchynovvideoweredownloadedviaIP addressXX:X:XXX-26.98.79. In October2010alone,Turchynovdistributedviaemailmorethan400stolenpressreleasesfromNewswireService2.80. Ieremenkoalsodistributedstolenpressreleaseselectronically. Forexample,onOctober10, 2012,IermenkoelectronicallysentalinktoapressreleasestolenfromNewswireService 1toanunidentifiedpersonbeforethepressreleasewaspubliclyissuedanddescribedhowhenowhademailsforemployeesatNewswireService 1thatwouldallowhimtohackintotheirhostserver.81. Aspartofthescheme,thetraderdefendantscompensatedthehackerdefendantsforstealingthepressreleasesfromtheNewswireServices. Attimes,thehackerdefendantsreceivedaflatfee and,atothertimes,apercentageof theprofitsobtainedfromtradingonthematerialnonpublicinformationstolenbythehackerdefendants. Thehackerdefendantsensuredtheywerereceivingtheagreed-uponpercentagebymonitoringthetraderdefendants'trading,eitherthroughreportsfromthetradersordirectaccesstotheaccountsusedtomakeunlawfultrades.82. Forexample,onJuly20,2011,theDubovoyGroupprovidedthehackerdefendantsaccountinformationandlogincredentialstooneof thetradingaccountsinthenameof ArkadiyDubovoy. Thisallowedthehackerdefendantstomonitorthetradinginthisaccounttodeterminethecompensationowedforcertaintrades.25 83. Thenextday,thataccountwasaccessedfrom IPaddressX::X:XX:X:X-18.42-theIPaddressforaworkstationTurchynovusedtoaccesswebpagesandoneof theIP addressesthehackerdefendantsusedtohacktheNewswireServices. Overthenextsixmonths,thatsameIPaddressaccessedDubovoy'stradingaccountmorethan300times.84. Attimes,thehackerdefendantsusedentitiesforthepurposeof collectingtheirshareof theill-gottengainsfromtheillicittrading. Forexample,uponinformationandbelief,anindividualassociatedwithTurchynovcontrolled,inwholeorinpart,anaccountatabankinEstonia. InFebruaryandMarch2012,theDubovoyGroupdefendantssent$225,000tothataccount. TheDubovoyGroupdefendantsattemptedtoconcealtheillegalpaymentsbysendingthemfromTanigoldAssets,oneof ArkadiyDubovoy'scompanies,andmislabelingthemaspaymentsfor"technologicalequipment"and"buildingequipment."The Dubovoy Group Communicated With The Hacker Defendants 85. TheDubovoyGrouphadaccesstothepressreleasesthehackerdefendantsstole.OnNovember26,2010,PavelDubovoyemailedGarkushaalinktotheinternetlocationof theserverTurchynovusedintheOctober24,2010internethackingvideo-aserverlocatedattheIPaddress:X:XX::XX::X-26.98-aswellasloginandpasswordinformationtotheserver. PavelDubovoyprovidedinstructions,whichinformedthereaderhowtologintotheserveranddownloadfiles andadviseduserstoconcealtheidentityof thecomputertheyusedtoaccesstheserver. GarkushaforwardedPavelDubovoy'semailtoanunidentifiedindividual.86. Inaddition,asnotedearlier,onJuly20,2011,theDubovoyGroupdefendantsprovidedthehackerdefendantswithaccesstoatleastoneof thebrokerageaccountsheldinthenameof ArkadiyDubovoy. Thenextday,aUkrainianIP address(XX::XXX:X-18.42)beganaccessingthatbrokerageaccount. TurchynovusedthatsameIPaddresstoaccesswebpages,and26 thehackerdefendantsusedthatIP addressinmultiplehackingattacksontheNewswireServices.ThatIP addressalsoaccessedasecondbrokerageaccountbelongingtoArkadiyDubovoy.87. TurchynovusedanotherIPaddress,XXX:XX-9.101,tohackNewswireService2fromJanuary 15,2013 toMarch2, 2013. ThatsameIPaddresswasalsousedtoaccessoneofArkadiyDubovoy'sbrokerageaccountsinMay2012.88. Inaddition,theDubovoyGroupdefendantsinstructedthehackerdefendantsaboutwhichpressreleasestotarget. Forexample,onOctober12,2011,viaanintermediary,PavelDubovoyemailedTurchynovalistof fourteenU.S.issuerswhoseupcomingearningsreleasesweretobedisseminatedaftertheU.S.marketsclosedonOctober12,2011 andOctober13,2011,andthefollowingweekaswell.89. Moreover,althoughthedefendantstookextensivemeasurestoconcealtheirfraud, thoseeffortswerenotalwayssuccessful. Forexample,onDecember18,2013,atapproximately1:21 p.m.ET, Khalupskyemailedascreenshotof anunpublishedpressreleaserelatingtoanearningsannouncementthehackerdefendantshadstolenfromNewswireService1tohisownemailaccount. Theunpublishedreleasehadbeenstolenbythehackerdefendantsandwasnotpublisheduntilhourslater,at4:04pmET. Totakethepicture,Khalupskyusedasmartphoneapplicationthatdoesnotretaindata. However,thepicturewaspreservedbecauseKhalupskysentitviaemail.TradingByTheDubovoyGroupDefendants90. TheDubovoyGroupdefendantsworkedinconcerttoexecutethefraudulentscheme,usingtheinformationstolenbythehackerdefendantsto makeillicittradesinnumerousaccounts. Theysharedcontrolof theaccountsinvolvedinthescheme,eitherthroughformal27 tradingauthorizationorinformallyviasharedloginsandsecurityinformationwhichallowedschemememberstoposeasoneanotherandtradeonline.91. TheDubovoyGroupdefendantstriedto concealtheirfraudbydeceptivelyspreadingtheirillicittradingacrossnumerousaccountsatmorethan 1 0brokeragefirms inthenamesofvariousindividualsandentities. Throughthisstrategy,theyhopedtoavoiddetectionbybrokers,regulators,andlawenforcement.92. Inaddition,theDubovoyGroupdefendantscoordinatedtheirillegalefforts. TheyhelpedeachotherandtheStrawOwnersestablishbrokerageaccountsthatwereusedinthescheme,theysharedtradingaccesstothebrokerageaccounts,andtheykepteachotherinformedoftheirprogressanddevelopments.93. IgorDubovoyandKhalupskyhelpedArkadiyDubovoysetupdomestictradingaccountsconnectedwiththeschemeandMomotokhelpedArkadiyDubovoyandtheStrawOwnersestablishaomesticaccountsconnectedwiththescheme.Likewise,IgorDubovoy,PavelDubovoy,Garkusha,KhalupskyandKorchevskyalsohelpedtheDubovoyGroupdefendantstosetupoff-shoreaccountsconnectedtothescheme.94. Forexample,onApril26,2013,IgorDubovoyemailedKorchevskystating:"Arkadiyaskedmetosellallof thestocksif youdonothaveInternetcanyoupleaseletmeknowiflshoulddoitorifyouhayetheserviceto do it." Korchevskydidnothaveformaltradingauthorityinanyof ArkadiyDubovoy'saccounts,butheneverthelessmadetradesinArkadiyDubovoy'saccounts.95. Similarly,althoughKhalupskydidnothaveanyaccountsinhisnameoranyformaltradingauthorityinanyof theaccountsinvolvedinthescheme,heconsideredhimselfaco-ownerof atleastoneof ArkadiyDubovoy'saccounts,atonepointinstructinghim: "Please28 configureour CMA-Edge[ending] *9078as describedbelow"(emphasisadded). ThatsameemailchainalsoshowsthatKhalupskyplacedtradesinthatMerrillLynchaccount.96. TheDubovoyGroupdefendantscoordinatedtheirunlawfultradingthroughemailsinwhichthey: (1)sharedinformationaboutaccesstothehackerdefendants' securewebsiteanddifferenttradingaccountsusedinthescheme;(2)identifiedearningsreleasestostealandtradeon;(3)directedthetradingactivity; (4)sharedinformationaboutpayments,costs,andprofits;and(5)discussedcreatingnewentitiesoraccountstoparticipateinthescheme.97. FromJanuary2011 throughFebruary2014,theDubovoyGroupdefendantsusedthestolenpressreleasesto collectivelytakemorethan1,400tradingpositionsinthewindowbetweenuploadtotheNewswireService'scomputersystemandpublicdissemination.Collectively,theDubovoyGroupdefendantsprofitedbymorethan$31 millionfromtheirinvolvementinthescheme.98. Whentradingonthestolenpressreleases,theDubovoyGroupdefendantsoftenusedleveragetoincreasetheirill-gottengains,tradinginoptionsandtradingonmargin.TheForeignTraderDefendantsUsedTheStolenInformation ToProfitablyTradeInAdvanceOfPublicIssuanceOfThePressReleases 99. Throughoutthescheme,theForeignTraderdefendantsusedthematerialnonpublicinformationstolenbythehackerdefendantstotradeprofitably.100. LiketheDubovoyGroupdefendants,theForeignTraderdefendantsmadeenormousprofitstradinginthewindowbetweenissuers'uploadof pressreleasestotheNewswireServicesandpublicdisseminationof thepressreleases. Often,thesetradesoccurredcloseintimetotheissuers'uploadof releasestotheNewswireService- aneventthat,butfor29 thehacking,wouldonlybeknownbytheclientandtheNewswireService. ThechartbelowsetsforththevolumeandprofitabilityoftheForeignTraderdefendants' unlawfulwindowtrades(exceptJaspenandBering,whicharediscussedfurtherbelow):MemellandGlobalHedgeExanteAmaryan,OceanPrime,Intertrade, Slepenkov,EscadaLavlinskiyFedoseevOmega26GuiborMakarovConcorde25614918681132$5.8M$1.1M$5.7M$3.7M101. LiketheDubovoyGroup,theForeignTraderdefendantsshiftedtheirfocusbetweentheNewswireServicesthroughouttherelevantperiod,instepwiththehackers' shiftingaccess. WhenthehackerdefendantsaccessedtheunpublishedpressreleasesonthecomputersystemsofNewswireService 1,theForeignTraderdefendantstradedbasedoninformationinthosereleases. WhenthehackerschangedtheirfocustoNewswireService2,theForeignTraderdefendantstradedin thesecuritiesof theissuersthatwerethesubjectof thosereleases.102. Uponinformationandbelief,liketheDubovoyGroupdefendants,theForeignTraderdefendantspaidthehackersaflatfee orapercentageoftheirprofitsforthematerial,non-publicinformationin asimilarmannerasmembersof theDubovoyGroupdid.103. Uponinformationandbelief,eachof theForeignTraderdefendantsknowinglyorrecklesslyengagedinadeceptiveact,similartothosedeceptiveactsdescribedabove,infurtheranceof theschemetoacquireandtradeonthematerial,non-publicinformation.30 TheForeignTraderDefendantsAreInter-Connected And ConnectedToTheDubovoyGroup 104. TheForeignTraderscanbeseparatedintothefollowingsixgroupsbasedonsimilartradingpatternsandinter-connections: (1)GlobalHedge,Exante,andMemelland;(2)Amaryan,OceanPrime,Intertrade,Slepenkov,andEscada;(3)LavlinskiyandFedoseev;(4)Omega26 andGuibor;(5)MakarovandConcorde;and(6)Jaspen,Suprananok,Bering,andZakharchenko.GlobalHedge,Exante,AndMemelland105. GlobalHedge,Exante,andMemellandareconnectedtoeachotherandtotheDubovoyGroupbycommonIPaddressusageandcommonaccountownership.106. Forexample,theChiefExecutiveOfficerofGlobalHedgeis alsoanauthorizedtraderforExante. ThispersonusedIPaddressXX:XX:XX-5.166 inFebruary2013,to accessGlobalHedge'sInteractiveBrokersaccountending*4444.107. Afewmonthslater,inJuly2013,thatsameIP addresswasusedtoaccesstheemailaccountDubovoy01@gmail.com,anemailaddressusedbyArkadiyDubovoy.108. Abouteightmonthslater,inMarch2014,thesameIPaddresswasusedbytheusemameassignedto anownerofMemellandto accessMemelland'sInteractiveBroker'saccountending*2799.1 09. Thenextmonth,thesameIP addresswasusedtoaccesstheemailaccountDubovoyp@gmail.com,anemail addressusedbyPavelDubovoy.110. Asdiscussedabove,GlobalHedge,Exante,andMemelland'stradingillustratestheirparticipationinthescheme. TheirtradingoccurredinthewindowoftimebetweenwhenthepressreleaseswereuploadedtotheNewswireService'scomputersystemandwhentheywerepubliclyreleased,oftencloseintimetotheissuers' uploadofreleasestotheNewswire31 Services. Andtheirtradingoscillatedbetweensecuritiesof issuerswhodisseminatedtheirpressreleasethroughNewswireService 1orNewswireService2inlock-stepwiththehackersshiftingaccess.Amaryan, Ocean Prime, Intertrade, Slepenkov, And Escada 111. Amaryanisconnecteddirectlyto OceanPrimeandIntertrade,andisconnectedtoSlepenkovandEscadathroughcommonIPusageandtradingpatterns. AmaryanisalsoconnectedtotheDubovoyGroupthroughacommonbusinessrelationship.112. AmaryanistheCEO of OceanPrime,haspowerof attorneyforit,andopenedOceanPrime'sbrokerageaccountthatwasusedinthescheme. Amaryanisalsothelonedirectoroflntertradeandanownerof theIntertradebrokerageaccountusedinthescheme. Moreover,Intertrade'saddressisthesameasAmaryan'shomeaddressinMoscow.113. SlepenkovistheCEOandownerof Escada. HecontrolstwoaccountsatInteractiveBrokers,oneinhisnameandoneinthenameofEscada,whichwere usedinthescheme.114. ThesametwoIPaddressesaccessedtheOceanPrime,Intertrade,Slepenkov,andEscadaaccountsatInteractiveBrokershundredsoftimes,andthesefouraccountstradedfrequentlyinthesamesecurities,onthesamedates,closeintimetoeachother115. AmaryanandOceanPrimearealsoconnectedtotheDubovoyGroupthroughacommonbusinessrelationship. TheownerofOceanPrimeisthesoledirectorof aforeigntradingcompanyestablishedbyPavelDubovoy,Korchevsky,andKhalupsky.116. Asdiscussedabove,thetradingintheseaccountscontrolledbyAmaryanandSlepenkovillustratestheirparticipationinthescheme. ThetradingoccurredinthewindowoftimebetweenwhenthepressreleaseswereuploadedtotheNewswireServices' computer32 systemsandwhentheywerepubliclyreleased,oftencloseintimeto theissuers' uploadofreleasestotheNewswireServices. AndtheirtradingoscillatedbetweensecuritiesofissuerswhodisseminatedtheirpressreleasethroughNewswireService1orNewswireService2inlock-stepwiththehackersshiftingaccess.Lavlinsky And Fedoseev 117. LavlinskyandFedoseevareconnectedtoeachotherthroughcommonIPusageandtradingpatterns. NineIP addresseshaveloggedintobothoftheiraccountsnumeroustimes. OneofthesenineIPaddresses,:XXX:XXX:X:X-0.168,accessedbothoftheirInteractiveBrokersaccountsover1 00times.118. LavlinskyandFedoseevarealsoconnectedtotheDubovoyGroupthroughcommontradingpatterns. Tradesin LavlinskiyandFedoseev'saccountstradedmanyof thesamesecurities,onthesamedates,inthesamedirection,withinminutesof tradesinaccountsheldinthenamesofBerattoGroup,Dubova,andotherDubovoyGroupmembers.119. Asdiscussedabove,thetradingintheseaccountscontrolledbyLavlinskiyandFedoseevillustratestheirparticipationinthescheme. ThetradingoccurredinthewindowoftimebetweenwhenthepressreleaseswereuploadedtotheNewswireServices'computersystemsandwhentheywerepubliclyreleased,oftencloseintimetotheissuers' uploadofreleasestotheNewswireServices. Andtheirtradingoscillatedbetweensecuritiesof issuerswhodisseminatedtheirpressreleasethroughNewswireService 1orNewswireService2inlock-stepwiththehackersshiftingaccess.Omega 26 AndGuibor 120.Omega26 andGuiborshareabusinessaddressandarelinkedtoeachotherbycommonownership. Theownerof Guiboralsoownspartof Omega26.33 121. TheyarealsoconnectionbycommonIP addressusageandtradingdata. ThesamefourIPaddressesaccessedbothaccountsmorethan100times. AndGuiborandOmega26tradedmanyof thesamesecurities,onthesamedates, inthesamedirection,withinminutesofoneanother.122. Inadditiontoequities,Omega26alsoengagedinCFDtradinginconnectionwiththescheme. Omega26'sCFDtradingwasfrequentlyinthesamesecuritiesastheCFDtradingbydefendantsJaspenandBering. Moreover,Omega26,Jaspen,andBeringallusedthesamebrokeratCantorFitzgeraldEurope.123. As discussedabove,thetradingintheseaccountscontrolledbyOmega26andGuiborillustratestheirparticipationinthescheme. ThetradingoccurredinthewindowoftimebetweenwhenthepressreleaseswereuploadedtotheNewswireServices'computersystemsandwhentheywerepubliclyreleased,oftencloseintfmetotheissuers'uploadof releasesto theNewswireServices. AndtheirtradingoscillatedbetweensecuritiesofissuerswhodisseminatedtheirpressreleasethroughNewswireService 1orNewswireService2inlock-stepwiththehackersshiftingaccess.Makarov And Concorde 124. MakarovandConcordeareconnectedtooneanotherandtoCFDtraders,JaspenandSupranonok.125. MarakovandConcordeareconnectedto eachotherthroughcommonIP usageandtradingpatterns. TheillicittradinginMakarov'sandConcorde'saccountswasoftendoneinthesamesecurities,onthesamedays,aroundthesametime,andoftenusingthesameIPaddress. Indeed,thesameIP addressaccessedbothMakarov'sandConcorde'saccountsover100times.34 126. Inaddition,previously,MakarovworkedatthesameinvestmentcompanyasSupranonok(andseveralotherJaspenpartners).127. InApril2014,ConcordewiredJaspenapproximately$1.5million.128. Asdiscussedabove,thetradingintheseaccountscontrolledbyMakorovandConcordeillustratestheirparticipationinthescheme. ThetradingoccurredinthewindowoftimebetweenwhenthepressreleaseswereuploadedtotheNewswireServices'computersystemsandwhentheywerepubliclyreleased,oftencloseintimetotheissuers' uploadofreleasestotheNewswireServices. AndtheirtradingoscillatedbetweensecuritiesofissuerswhodisseminatedtheirpressreleasethroughNewswireService1orNewswireService2inlock-stepwiththehackersshiftingaccess.JaspenAndBeringUsedTheStolenInformation ToProfitablyTradeInCFDsInAdvanceOfPublicIssuanceOfThePressReleases 129. Thesixthgroupof foreigntradersconsistsof JaspenandBering,andtheirrespectiveownersandoperatorsSuprananokandZakharchenko(whendistinguishedfromtheotherForeignTraders,"ForeignCFDTraders"). WhiletheForeignCFDTraderslargelyusedCFDtotakeadvantageofthestoleninformation,theirpatternoftradingin-the-windowbetweentheuploadof pressreleasestothehackedNewswireServicesandthepublicdisseminationofthosepressreleasesandtheoutsizedprofitabilityofthattradingmirroredtheactivityof theDubovoyGroupandtheotherForeignTraderdefendants.130. Forexample,fromJune 16,2011 throughApril15,2014,nearlyall ofJaspen'stradeswere"in-the-window"betweenuploadandpublicdisseminationof pressreleasesfrom theNewswireServices. AndJaspenmadeover150windowtrades.35 131. Similarly,from July19,2012throughFebruary20,2014,nearlyallofBering'stradeswere"inthewindow"betweenuploadandpublicdisseminationofpressreleasesfromtheNewswireServices. Beringmadeover70windowtrades.132. Combined,JaspenandBeringmadeover$31 millioninillicitprofitsfromthesewindowtrades.133. BecauseequityCFDsmirrorthemovementandpricingoftheunderlyingstockonadollar-for-dollarbasis,anyfluctuationinthepublicmarketpriceoftheunderlyingsecurityisreflectedintheunrealizedgainorlossoftheCFDposition. ThepurchaseandsalepricesofequityCFDsaregenerallyidenticaltothepricesquotedforthesharesonthepublicexchangeonwhichtheunderlyingstockislisted. (Inaddition,whenpurchasingalongCFDposition,JaspenandBeringreceivedotherbenefitscommonlyassociatedwithownershipoftheunderlyingstock,suchastherighttoreceivedividendpaymentsandparticipateinstocksplits.)134. Here, becausethefraudpertainedto securitiestradedonU.S. securitiesexchanges,thepurchasesandsalespricesof theCFDstradedbyJaspenandBeringweredeterminedbythepricesontheU.S. exchangeonwhichtheunderlyingstockwasissued.Moreover,thepricesweredenominatedinU.S. dollars.135. JaspenandBeringtradedCFDthrough: Saxo,Cantor,GFT, andADM("CFDProviders"). EachoftheCFDProvidershedgeditsexposurecreatedbytheCFDtradesbyexecutingtradesintheUnitedStates. Thus,theseCFDtradesweretheproximatecauseof tradesintheUnitedStatesequitymarkets.136. Forexample,at4:00PMonAugust1,2012,WalterEnergyInc. ("WalterEnergy"),astocklistedontheNewYorkStockExchange,announcedquarterlysalesresultsbyissuingapressreleasethroughNewswireService 1. 36 137. ThepressreleasewassubmittedtoNewswireService 1earlierthatsameday,at1:48p.m.,alittlemorethantwohoursbeforeitwaspubliclyreleased.138. At2:14p.m.-lessthan30minutesafterthep ~ s s releasehadbeenuploadedtoNewswireService 1 'ssystem-JaspenboughtWalterEnergyCFDs. Thatafternoon,inlessthantwohours,JaspenboughtCFDsreferencing36,000WalterEnergysharesof stock. ThesetradeswerehedgedintheUSmarketsbyCitadelDerivativesGroup,LLC,whichbought36,000sharesofWalterEnergystockusinganaccountatCitadelSecuritiesLLC,abroker-dealerregisteredintheUnitedStates. Thenotionalvalueofthepurchaseswas$1,236,535.139. Duringthatsame,shortwindowoftime,JaspenalsoboughtCFDsreferencingatotalof 41,123 sharesofWalterEnergystockinasecondaccount, CantoraccountXXXXX0011.ThesetradeswerehedgedintheUSmarketsbyCantorFitzgeraldEuropebuying41,123 sharesofWalterEnergystockusinganaccountatCreditAgricoleSecurities,.abroker-dealerregisteredintheUnitedStates. Thenotionalvalueofthepurchaseswas$1,413,332.140. BeringalsoboughtWalterEnergyCFDsthatafternoonintheshortwindowoftimebetweenwhentheWalterEnergypressreleasewasuploadedtoNewswireService 1 'ssystemandwhenitwaspubliclyreleased. BeringboughtCFDsreferencingatotalof 45,000sharesofWalterEnergystock. ThesetradeswerehedgedintheUSmarketsbyCantorFitzgeraldEuropebuying45,000WalterEnergysharesinanaccountatCreditAgricoleSecurities. Thenotionalvalueofthepurchaseswas$1,552,050.141. Thenextday,afterthepressreleasehadbeenissued,JaspencloseditspositionsinWalterEnergyCFDs,realizingaprofitofnearly$100,000.142. Thatsameday,BeringalsocloseditspositioninWalterEnergyCFDs,realizingaprofitof$36,944.37 143. TheForeignCFDTradersweresophisticatedtraderswho knew,orwererecklessinnotknowing,thattheirtradesinCFDswouldcauseequivalenttradesintheunderlyingstocksintheU.S.Markets.Examples Of Defendants' Illegal Trading Using The Stolen Press Releases 144. Beloware 1I examplesof wherethetraderdefendantsusedthematerialnonpublicinformationstolenbythehackerdefendants.Example 1 - Caterpillar 145. Duringtherelevantperiod,Caterpillar,Inc. ("Caterpillar"),aU.S.companyheadquarteredinPeoria,IL,wasinthebusinessofmanufacturingandsellingconstructionequipment,amongotherthings. Caterpillar'scommonstockwaslistedontheNYSE.I46. CaterpillaruploadedanearningsreleasetoNewswireService2onOctober21,2011,announcingthirdquarterresults,includingall-timerecordthirdquru.iersalesandrevenuesandanimprovedoutlookfor20II.147. Betweenthetimeitwasuploadedat9:40a.m.ETonOctober21 andthepublicdistributionoftheearningsreleasebyNewswireService2,anumberofdefendantsbought,and/oropenedbullishoptionpositionsin, Caterpillarsecuritiesandprofited,assetforthbelow:DateTime (ET)EventProfits 10/21/2011 9:40am Caterpillaruploads3QearningsreleasetoNewswireService210/21/2011 1:30pm JaspenbuysCaterpillarCFDsinGFT*1765 $42,31010/21/2011 1:40pm JaspenbuysCaterpillarstockinAPX*0765 $34,68810/2112011 3:28pm DubovoyGroupbuysCaterpillarstockinKorchevsky'sTDArneritrade*2449$448,24110/21/2011 3:29pm DubovoyGroupbuysCaterpillarstockinAPDDevelopers'TDAmeritrade*4751$69,00010/21/2011 3:34pm DubovoyGroupbuysCaterpillarstockinAPDDevelopers' CharlesSchwab*0365$43,50038 10/21/2011 3:35pm DubovoyGroupbuysCaterpillarstockinArkadiyDubovoy'sCharlesSchwab*8834$45,00710/21/2011 3:46pm DubovoyGroupbuysCaterpillarstockinAPDDevelopers'TDAmeritrade *7954$37,20710/21/2011 3:52pm DubovoyGroupbuysCaterpillarstockin StrawOwner2'sCharlesSchwab*3160$5,04810/24/2011 7:30am NewswireService2distributesCaterpillar's3Qearningsreleasetothepublic148. Thepriceof Caterpillarstockrose$4.38pershareafterthenewswasannounced.149. Withthebenefitof thestolenmaterialnonpublicinformation,allofthedefendantswhotradedinCaterpillarsecuritiesduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktoincreasewhenthenewswaspublished.150. Allofthesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$648,000in ill-gottengains. AndtheForeignTraderdefendantscollectivelyrealizedover$76,000inill-gottengains.Example 2 - TreeHouse Foods, Inc. 151. Duringtherelevantperiod,TreeHouseFoods,Inc. ("TreeHouse")was involvedinthefoodmanufacturingindustry. ThecompanywasincorporatedinDelawarewithitsprincipalplaceof businessinIllinois. TreeHousecommonstockwaslistedonNYSE.152. OnJanuary 19,2012,TreeHouseuploadedtoNewswireService2apressreleaseannouncinglowerthanexpectedearningsnumbersforthefourthquarterof 2011.153. NewswireService2publiclydistributedthatpressreleaseat7:00a.m.thenextday,beforetheU.S.marketsopened.39 154. Betweenthetimeitwasuploadedat2:26p.m.ETandthepublicdistributionoftheearningsreleasebyNewswireService2,anumberof defendantssoldshortTreeHousestock,soldCFDs, and/orengagedinbearishoptionpositionsandprofited,assetforthbelow:DateTime (ET)EventProfits 1119/2012 2:26pm TreeHouseuploadsreleasetoNewswireService21/19/2012 2:40pm DubovoyGroupbuysTreeHouseputoptionsinStrawOwner2'sTDAmeritrade*2779$4,6001/19/2012 2:50pm JaspensellsTreeHouseCFDsinSaxo*INET $163,2521/19/2012 3:12pm DubovoyGroupbuysTreeHouseputoptionsinKorchevsky'sE*Trade*6623$144,2301/19/2012 3:17pm DubovoyGroupsellsshortTreeHousestockinAPDDevelopers'TDAmeritrade*7954$162,0741/19/2012 3:21pm DubovoyGroupsellsshortTreeHousestockinStrawOwner2' sCharlesSchwab*3160$12,8881119/2012 3:23pm DubovoyGroupsellsshortTreeHousestockinArkadiyDubovoy'sScottrade*0584$10,0911/19/2012 3:25pm DubovoyGroupsellsshortTreeHousestockin M&IAdvising'sTDAmeritrade*7757$1,4871119/2012 3:27pm DubovoyGroupsellsshortTreeHousestockinAPDDevelopers' CharlesSchwab*0365$15,5811/20/2012 7:00am NewswireService2distributestheTreeHousepressrelease155. ThepriceofTreeHousestockfell over.$6pershareafterthenewswasannounced.156. Withthebenefitofthestolenmaterialnonpublicinformation,allofthedefendantswhotradedinTreeHouseduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceofthestocktodecreasewhenthenewswaspublished.157. Allofthesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$350,000inill-gottengains. AndtheForeignTraderdefendantsrealizedover$163,000inill-gottengains.40 Example 3 - RadioShack 158.During the relevant period, RadioShack was an American electronics retail chain. RadioShack's common stock was traded on NYSE. 159.On January 30, 2012, RadioShack uploaded a press release announcing its preliminary results for fourth quarter 2011to Newswire Service 2 at approximately 2:26p.m. ET.The press release disclosed that RadioShack had realized lower earnings than expected. 160.Newswire Service 2 publicly distributed that press release later that day at approximately 4:17p.m. 161.Between the time it was uploaded at 2:26p.m. ET and the public distribution of the earnings release by Newswire Service 2,a number of defendants sold short RadioShack stock, sold CFDs, and/or engaged in bearish option positions and profited, asset forth below: DateTime (ET)EventProfits 1/30/20122:26pmRadioShack uploads press release to Newswire Service 2 1/30/20122:51pmJaspen sells RadioShack CFDs in Saxo *1048 and GFT *1765 $766,736 1/30/20122:54pmDubovoy Group purchases RadioShack put options in Straw Owner 2's TD Ameritrade *2779 $14,600 1/30/20123:29pmDubovoy Group sells short RadioShack stock in APD Developers' TD Ameritrade *7954 $297,613 1/30/20123:38pmDubovoy Group sells short RadioShack stock in Straw Owner 2's Charles Schwab *3160 $24,502 1/30/20123:40pmDubovoy Group sells short RadioShack stock in Arkadiy Dubovoy's Scottrade *0584 $5,380 1/30/20123:47pmDubovoy Group sells short RadioShack stock in M&I Advising's TD Ameritrade *7757 $1,693 1/30/20124:17pmNewswire Service 2 distributes the RadioShack press release 162.After the press release was issued, the price of RadioS hack stock dropped nearly 30%. 41 163. Withthebenefitofthestolenmaterialnonpublicinformation,allofthedefendantswhotradedinRadioShackduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceofthestocktodecreasewhenthenewswaspublished.164. Allof thesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$343,000inill-gottengains. Jaspenrealizedover$766,000inill-gottengains.Example 4 -Acme Packet 165. Duringtherelevantperiod,AcmePacket,Inc. ("Acme"),aU.S. companyheadquarteredinBedford,MA,wasinvolvedinthetechnologyindustry. Acme'scommonstockwaslistedonNASDAQ.166. AcmeuploadedanearningsreleasetoNewswireService1onJuly25,2012,announcingsecondquarterresults,includingadeclinein revenueandnetincomeascomparedtothesecondquarterof 2011.167. Betweenthetimeitwasuploadedat5:53p.m.ETonJuly25 andthepublicdistributionoftheearningsreleasebyNewswireService 1, whichoccurredat4:05p.m.thefollowingday, anumberofdefendantssoldshort,and/oropenedbearishoptionpositionsin,Acmesecuritiesandprofited,assetforthbelow:DateTime (ET)EventProfits 7/25/2012 5:53pm Acmeuploads2QearningsreleasetoNewswireService 17/26/2012 1:36pm DubovoyGroup sellsAcmecalloptionsandbuysAcmeputoptionsinStrawOwner2'sTDAmeritrade*2779$14,1007/26/2012 1:46pm ExantesellsshortAcmestockinInteractiveBrokers*2751$29,7557/26/2012 1:51pm GlobalHedgesellsshortAcmestockinInteractiveBrokers*4444$12,13442 7/26/2012 1:55pm GuiborsellsshortAcmestockinInteractiveBrokers*2450$259,7537/26/2012 2:06pm DubovoyGroupsellsshortAcmestockinArkadiyDubovoy'sCharlesSchwab*8834$372,3987/26/2012 2:19pm BeringsellsAcmeCFDsinCantorFitzgerald*0966 $257,4057/26/2012 2:51pm DubovoyGroupsellsshortAcmestockinStrawOwner1 'sTradeStation*7799$25,7457/26/2012 2:54pm DubovoyGroupbuysACMEputoptionsinArkadiyDubovoy'sFidelity*6216$33,7797/26/2012 3:02pm DubovoyGroupsellsshortAcmestockinArkadiyDubovoy'sScottrade*0584$69,2557/26/2012 3:20pm DubovoyGroupsellsshortAcmestockinStrawOwner4'sInteractiveBrokers*8944$42,5357/26/2012 3:30pm DubovoyGroupsellsshortAcmestockinArkadiyDubovoy'sE*Trade*6987$127,7047/26/2012 4:05pm NewswireService1distributesAcme's2Qearningsreleasetothepublic168. Thepriceof Acmestockfell $1.16pershareafterthenewswasannounced.169. Withthebenefitof thestolenmaterialnonpublicinformation,allof thedefendantswhotradedinAcmesecuritiesduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceofthestocktodecreasewhenthenewswaspublished.170. Allof thesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$685,000inill-gottengains. AndtheForeignTraderscollectivelyrealizedover$559,000inill-gottengains.Example 5- Zumiez, Inc. 171. Duringtherelevantperiod,Zumiez,Inc. ("Zumiez")wasaclothingstorecompany,specializingintheretailof actionsportsrelatedapparelandaccessories. ThecompanywasincorporatedinandmaintaineditsprincipalplaceofbusinessinWashington. Zumiez'scommonstockwaslistedonNASDAQ.43 172. OnOctober31,2012,ZumiezuploadedapressreleasetoNewswireService 1inwhichit,amongotherthings,reviseditsthird-quarterguidancedownwardduetoachallengingsalesenvironmentinEurope.173. NewswireService 1publiclydisseminatedthepressreleasethatsamedayat4:05p.m.ET,aftertheU.S.marketsclosed.174. Betweenthetimeitwasuploadedat1:29p.m.ETandthepublicdistributionoftheearningsreleasebyNewswireService1, anumberofdefendantssoldshortZumiezstock,andprofited,assetforthbelow:DateTime (ET)EventProfits 10/31/2012 1:29pm ZumiezuploadspressreleasetoNewswireService 110/31/2012 1:52pm Intertrade(Arnaryan)sellsshortZumiezstockinInteractiveBrokers*8284$66,84910/31/2012 1:54pm SlepenkovsellsshortZumiezstockinInteractiveBrokers*6218$33,61310/31/2012 2:09pm Omega26sellsshortZumiezstockinInteractiveBrokers*2898$103,01810/31/2012 2:09pm GuiborsellsshortZurniezstock inInteractiveBrokers*2450$69,01610/31/2012 2:21pm ExantesellsshortZumiezstockinLekaccount $75,86110/31/2012 2:30pm FedoseevsellsshortZumiezstock inInteractiveBrokers* 4148$11,82210/31/2012 2:34pm LavlinskiysellsshortZumiezstock inInteractiveBrokers*7182$2,11410/31/2012 3:01pm GlobalHedgesellsshortZumiezstock inInteractiveBrokers* 4444$87,61010/31/2012 4:00pm NewswireService 1distributesZumiezearningsrelease175. ThepriceofZumiezstockfell over$4pershareafterthenewswasannounced.176. Withthebenefitofthestolenmaterialnonpublicinformation,allofthedefendantswhotradedinZumiezduringthewindowbetweenuploadoftheearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestockto decreasewhenthenewswaspublished.44 177. Allof thesedefendantsprofited. TheForeignTraderdefendantsrealizedover$449,000inill-gottengains.Example6- BrocadeCommunicationsSystems178. Duringtherelevantperiod,BrocadeCommunicationsSystems("Brocade")wasatechnologycompany,incorporatedinDelawarewithitsprincipalplaceof businessinCalifornia.Brocade'scommonstockwaslistedonNASDAQ.179. OnMay1,2013 atapproximately3:29p.m. ET,BrocadeuploadedapressreleasetoNewswireService 1, announcingthat ithadrevisedearningspershareandrevenueguidancedownward.180. NewswireService 1publiclydisseminatedthepressreleasethatsamedayat4:05p.m.ET,aftertheU.S.marketsclosed.181. Asthetimelinebelowindicates,manyoftheForeignTraderdefendantstradedinadvanceofthisannouncementbyBrocade,andtheydidso wilhinlhe36-minulewindowof timebetweenwhenNewswireService1receivedthereleaseandwhenitmadethereleasepublic.Moreover,theForeignTraderdefendants'tradingactivityisclusteredinanevensmallereight-minutewindow,andall of theForeignTraderdefendantstookshortpositions,whichisthelogicaltradetomakeinadvanceof negativeguidance:Date Time(ET) Event Profit5/1/2013 3:29pm BrocadeuploadsnewsreleasetoNewswireService15/1/2013 3:39pm JaspensellsBrocadeCFDsinSaxo*NET2 $16,000511/2013 3:39pm MakarovsellsshortBrocadestockinInteractiveBrokers*4548$4705/1/2013 3:43pm ExantesellsshortBrocadestockinLekaccount $20,836511/2013 3:45pm GuiborsellsshortBrocadestockinInteractiveBrokers*2450$153,6715/1/2013 3:45pm Omega26sellsshortBrocadestockinInteractiveBrokers*2898$183,91345 511/2013 3:46pm SlepenkovsellsshortBrocadestockinInteractiveBrokers*6218$27,6905/1/2013 3:46pm BeringsellsBrocadeCFDsinCantorFitzgerald*0969 $72,258511/2013 3:47pm OceanPrime(Amaryan)sellsshortBrocadestockininInteractiveBrokers*9827$36,5395/1/2013 4:05pm NewswireService 1distributesBrocadepressreleasetopublic182. ThepriceofBrocadestockfell $0.32pershareafterthenewswasannounced.183. Withthebenefitof thestolenmaterialnonpublicinformation,all of thedefendantswhotradedinBrocadeduringthe30minutewindowbetweenuploadofthereleaseanditspublicationtradedinamannerexpectingthepriceofthestocktoincreasewhenthenewswaspublished.184. Allof thesedefendantsprofited. TheForeignTraderdefendantsrealizedover$511,000inill-gottengains.Example 7- Edwards Life Sciences 185. Duringtherelevantperiod,EdwardsLifesciences("Edwards")wasinvolvedinthescienceofheartvalvesandhemodynamicmonitoring. ItwasincorporatedinDelawareandheadquarteredinCalifornia. Edwards'commonstockwaslistedontheNYSE.186. EdwardsuploadedanearningsreleasetoNewswireService1onApril23,2013,atapproximately11:39a.m.ET. TheearningsreleasestatedthatEdwards'earningspersharehadincreasedby 125%butthattheCompanywasloweringitsguidanceforthenextquarter.187. Betweenthetimeitwasuploadedat 11:39a.m. ETonApril23andthepublicdistributionoftheearningsreleasebyNewswireService 1,anumberof defendantssoldshortEdwardsstockandCFDsandprofited,assetforthbelow:46 DateTime (ET)EventProfits 4/23/2013 11:39pm Edwardsuploads 1 QearningsreleasetoNewswireService 14/23/2013 12:33pm MakarovsellsshortEdwardsstockinInteractiveBrokers*4548$1,0884/23/2013 12:43pm ExantesellsshortEdwardsstockinInteractiveBrokers*4548$1,939,7164/23/2013 1:04pm LavlinskiysellsshortEdwardsstockinInteractiveBrokers*7182$63,3594/23/2013 1:04pm FedoseevsellsshortEdwardsstockinInteractiveBrokers* 4148$128,9474/23/2013 1:09pm GlobalHedgeCapitalFundsellsshortEdwardsstockinInteractiveBrokers*4444$71,5934/23/2013 1:13pm JaspensellsEdwardsCFDsinGFT*1765,CantorFitzgerald*0994,CantorFitzgerald*0011$670,5734/23/2013 1:28pm DubovoyGroupsellsshortEdwardsstockandsellsEdwardsputoptionsinKorchevsky'sE*Trade*6623$250,2544/23/2013 1:30pm DubovoyGroupsellsshortEdwardsstockinKorchevsky'sJPMorgan*0336$47,4874/23/2013 1:32pm DubovoyGroupsellsshortEdwardsstockinArkadiyDubovoy'sMerrillLynch*9078$172,8764/23/2013 1:41pm DubovoyGroupsellsshortEdwardsstockinStrawOwner1'sTradeStation*7799$31,6994/23/2013 1:43pm IntertradesellsshortEdwardsstockinInteractiveBrokers*8284$154,4824/23/2013 1:54pm BeringsellsEdwardsCFDsinCantorFitzgerald*969 $280,2404/23/2013 1:55pm DubovoyGroupsellsshortEdwardsstockinArkadiyDubovoy'sE*Trade*6987$117,8494/23/2013 2:29pm SlepenkovsellsshortEdwardsstockinInteractiveBrokers*6218$107,0004/23/2013 2:43pm Omega26sellsshortEdwardsstockinInteractiveBrokers*2898$166,4344/23/2013 2:44pm GuiborsellsshortEdwardsstockinInteractiveBrokers*2450$113,0924/23/2013 3:02pm DubovoyGroupsellsshortEdwardsstockinArkadiyDubovoy'sScottrade*0584$9,8414/23/2013 3:02pm DubovoyGroupsellsshortEdwardsstockinArkadiyDubovoy'sFidelity*6216$182,0634/23/2013 3:10pm DubovoyGroupsellsshortEdwardsstockinStrawOwner4'sInteractiveBrokers*8944$31,3534/23/2013 4:01pm NewswireService1 distributesEWearningsreleasetothepublic47 188. Afterthenewswaspubliclyreleased,themarketrespondedthewaydefendantsanticipatedandthepriceofEdwardsstockdroppedfrom$82.81 pershareto$64.60pershare.189. Withthebenefitof thestolenmaterialnonpublicinformation,all ofthedefendantswhotradedinEdwardsstockandCFDsduringthewindowbetweenuploadoftheearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktodecreasewhenthenewswaspublished.190. Withtheunfairadvantageofthestolenmaterialnonpublicinformation,theDubovoyGrouprealizedover$843,000inillicitprofitsonthesetransactions,andtheForeignTraderdefendantscollectivelyrealizedover$3.6millioninillicitprofits.Example 8 - Panera Bread Co.191. Duringtherelevantperiod,PaneraBreadCo. ("Panera")wasacompanyinvolvedinthefood industry,incorporatedinDelawarewithitsprincipalplaceofbusinessinMissouri.Panera'scommonstockwaslistedonNASDAQ.192. Atapproximately10:00a.m.ETonJuly23,2013,PanerauploadedapressreleasetoNewswireService 1, whichannouncedamongotherthings,thatPanerawasrevisingdownwarditsdilutedearningspersharetargetforfiscal2013.193. NewswireService 1publiclydisseminatedthepressreleaselaterthatsamedayat4:00p.m.,aftertheU.S. marketsclosed194. BetweenthetimeitwasuploadedandthepublicdistributionoftheearningsreleasebyNewswireService 1,anumberof defendantssoldshortPanerasecuritiesorCFDsandprofited,as setforthbelow:DateTime (ET)Event Profit 7/23/2013 10:00am PanerauploadspressreleasetoNewswireService 17/23/2013 12:15pm JaspensellsPaneraCFDsinADM*CM07andCantorFitzgerald*0011$1,561,70348 7/23/2013 2:05pm GlobalHedgesellsshortPanerastockinInteractiveBrokers*4444$19,0767/23/2013 3:11pm DubovoyGroupsellsshortPanerastockandbuysPaneraputoptionsinKorchevsky'sE*Trade*6623$216,4517/23/2013 3:32pm DubovoyGroupsellsshortPanerastockinArkadiyDubovoy'sFidelity*6216$89,5087/23/2013 3:33pm DubovoyGroupsellsshortPanerastockinStrawOwner1'sInteractiveBrokers*7799$6,1107/23/2013 3:34pm DubovoyGroupsellsshortPanerastockinArkadiyDubovoy'sE*Trade*6987$15,2547/23/2013 3:38pm ConcordesellsshortPanerastockinInteractiveBrokers*1358$219,0457/23/2013 3:39pm DubovoyGroupsellsshortPanerastockinArkadiyDubovoy'sMerrillLynch*9078$25,2777/23/2013 3:40pm DubovoyGroupsellsshortPanerastockinBerattoGroup'sAPX*5038$23,2317/23/2013 3:41pm BeringsellsPaneraCFDsinCantorFitzgerald*0969 $93,2447/23/2013 3:42pm DubovoyGroupsellsshortPanerastockinStrawOwner4'sInteractiveBrokers*8944$6,4807/23/2013 3:45pm MemellandsellsshortPanerastockinInteractiveBrokers*4300$19,8087/23/2013 3:47pm IntertradesellsshortPanerastockinInteractiveBrokers*8284$22,2297/23/2013 3:47pm SlepenkovsellsshortPanerastockin InteractiveBrokers*6218$26,9847/23/2013 3:49pm MakarovsellsshortPanerastockinInteractiveBrokers*4548$3037/23/2013 3:50pm DubovoyGroupsellsshortPanerastockinKorchevsky'sJPMorgan*0366$50,2797/23/2013 4:00pm NewswireService 1disseminatesPaneranewsreleasetothepublic195. ThepriceofPanerastockfellfromaclosingpriceof$182.01 pershareonJuly23toaclosingpriceof$169.62pershareonJuly24.196. Withthebenefitof thestolenmaterialnonpublicinformation,all ofthedefendantswhotradedinPaneraduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktodecreasewhenthenewswaspublished.49 197. Allofthesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$432,000inill-gottengains. AndtheForeignTraderdefendantsrealizedover$1.9millioninill-gottengains.Example 9- VMWare 198. Duringtherelevantperiod,VMware, Inc. ("VMware"),aU.S.companyheadquarteredinPaloAlto, CA,wasinvolvedinvirtualizationandcloudinfrastructure.VMware'scommonstockwaslistedontheNYSE.199. Atapproximately, 12:09p.m.onJuly23,2013,VMwareuploadedanearningsreleasetoNewswireService1announcingsecondquarterresults,including 11%year-overyearrevenuegrowthandarecordhighnon-GAAPoperatingmargin.200. NewswireService1publiclydisseminatedthepressreleasethatsamedayat4:01p.m.,aftertheU.S.marketsclosed.201. Betweenthetimeitwasuploadedandthepublicdistributionoftheean1ingsreleasebyNewswireService1, anumberof defendantsboughtVMwaresecuritiesandprofited,assetforthbelow:DateTime (ET)EventProfits 7/23/2013 12:09pm VMwareuploads2QearningsreleasetoNewswireService 1 7/23/2013 1:23pm MakarovbuysVMwarestockinInteractiveBrokers*4548$5,3987/23/2013 1:37pm SlepenkovbuysVMwarestockinInteractiveBrokers*6218$64,6227/23/2013 1:38pm OceanPrime(Amaryan)buysVMwarestockinInteractiveBrokers*9827$110,9087/23/2013 2:11pm BeringbuysVMW areCFDsinCantorFitzgerald*0969$112,1737/23/2013 2:12pm ConcordebuysVMwarestockinInteractiveBrokers*1358$709,3107/23/2013 2:25pm IntertradebuysVMstockinInteractiveBrokers*8284$11,66250 7/23/2013 2:48pm BeringbuysVMwareCFDsinCantorFitzgerald*0969$112,1747/23/2013 3:31pm DubovoyGroupbuysVMwarestockinArkadiyDubovoy'sFidelity*6216$50,1827/23/2013 3:35pm DubovoyGroupbuysVMwarestockinArkadiyDubovoy'sE*Trade*6987$5,8977/23/2013 3:35 pm DubovoyGroupbuysVMwarestockin Korchevsky'sE*Trade*6623$83,0617/23/2013 3:35 pm MemellandbuysVMwarestockinInteraCtiveBrokers*4300$40,7487/23/2013 3:46pm DubovoyGroupbuysVMwarestockinStrawOwner4'sInteractiveBrokers*8944$12,4457/23/2103 3:50pm DubovoyGroupbuysVMwarestockinSoutheasternHolding'sTDAmeritrade*6350$14,7597/23/2013 3:55 pm DubovoyGroupbuysVMwarestockinKorchevsky'sJPMorgan*0336$99,7177/23/2013 4:01pm NewswireService1distributesVMware's2Qearningsreleasetothepublic202. ThepriceofVMwarestockrose$11.92pershareafterthenewswasannounced.203. Withthebenefitofthestolenmaterialnonpublicinformation,allof thedefendantswhotradedinVMwaresecuritiesduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktoincreasewhenthenewswaspublished.204. Allofthesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$266,000inill-gottengains. AndtheForeignTraderdefendantscollectivelyrealizedover$1.1millioninill-gottengains.Example 10- TIBCO Software 205. Duringtherelevantperiod,TIBCOSoftware("TIBCO"),aU.S.companyheadquarteredinCalifornia,wasinvolvedinthedevelopmentofinfrastructureandbusinessintelligencesoftware. TIBCO'scommonstockwaslistedonNASDAQ.51 206. OnSeptember19,2013, atapproximately1:47p.m.,TIBCOuploadedanewsreleasetoNewswireService1announcingthirdquarterresults,includingrecordthirdquartertotalrevenueandanincreaseinearningspershareo"\)'ertheprioryear'sthirdquarterearningspershare.207. NewswireService1publiclydisseminatedthepressreleasethatsamedayat4:05p.m.,aftertheU.S.marketsclosed.208. Betweenthetimeitwasuploadedandthepublicdistributionof thepressreleasebyNewswireService 1, anumberof defendantspurchasedTIBCOsecuritiesandprofited,assetforthbelow:DateTime (ET) EventProfits 9/19/2013 1:47pm TIBCOuploads3QearningsreleasetoNewswireService 1 -9119/2013 2:35pm DubovoyGroup buysTIBCOstockinArkadiyDubovoy's $15,570OptionsHouse*89579119/2013 3:15pm JaspenbuysTIBCOCFDsinGFT*1765andCF *0011 $56,8309119/2013 3:16pm MakarovbuysTIBCOstockinInteractiveBrokers*4548 $7,7969/19/2013 3:17pm SlepenkovbuysTIBCOstockinInteractiveBrokers*6218 $93,8929/19/2013 3:18pm OceanPrime(Amaryan)buysTIBCOstockinInteractive $108,300Brokers*98279/19/2013 3:19pm BeringbuysTIBCOCFDsinCantor*969 $88,7809/19/2013 3:23pm MakarovbuysTIBCOCFDsinInteractiveBrokers*4548F $2,0709/19/2013 3:24pm IntertradebuysTIBCOstockinInteractiveBrokers*8284 $20,4479/19/2013 3:29pm DubovoyGroupbuysTIBCOstockinArkadiyDubovoy's .$37,451MerrillLynch*90789/19/2013 3:31pm JaspenbuysTIBCOCFDsinSAXO*INET $18,0209/19/2013 3:36pm DubovoyGroupbuysTIBCOstockinBerattoGroup's $33,358APX*50389/19/2013 3:36pm DubovoyGroupbuysTIBCOstockinStrawOwner3's $7,580InteractiveBrokers*83489/19/2013 3:36pm GuiborbuysTIBCOstockinInteractiveBrokers*2450 $51,2699119/2013 3:40pm DubovoyGroupbuysTIBCOstockinArkadiyDubovoy's $30,663E*Trade*69879/19/2013 3:45pm DubovoyGroupbuysTIBCOstockinKorchevsky's $60,448E*Trade*662352 9/19/2013 3:53pm DubovoyGroupbuysTIBCOstockinArkadiyDubovoy'sFidelity*6216$66,4079/19/2013 4:05pm NewswireService 1distributesTIBCO's3Q earningsreleasetothepublic209. ThepriceofTIBCOstockrose$0.45pershareafterthenewswasannounced.210. Withthebenefitofthestolenmaterialnonpublicinformation,all of thedefendantswhotradedinTIBCOduringthewindowbetweenuploadoftheearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktoincreasewhenthenewswaspublished.211. Allof thesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$250,000inill-gottengains. AndtheForeignTraderdefendantsrealizedover$447,000inill-gottengains.Example 11-Align Technology 212. Duringtherelevantperiod,AlignTechnology,Inc. ("Align"),aU.S.companyheadquarteredinSanJose,CA,wasinvolvedindesigning,manufacturing,andmarketingInvisalign,aproprietarymethodfortreatingthemisalignmentof teeth. Align'scommonstockwaslistedonNASDAQ.213. AlignuploadedanearningsreleasetoNewswireService 1onOctober17,2013,announcingthirdquarterresults, including20.5%year-overyearrevenuegrowth.214. Betweenthetimeitwasuploadedat1:28a.m. ETonOctober17 andthepublicdistributionoftheearningsreleasebyNewswireService 1, anumberofdefendantsboughtAlignsecuritiesandprofited,assetforthbelow:DateTime (ET)EventProfits 10/17/2013 1:28am Alignuploads3Qearningsreleaseto NewswireService153 DubovoyGroupbuysAlignstockinArkadiy $72,067Dubovoy'sOptionsHouse*895710/17/201310/17/2013 12:34pmJaspenbuysAlignCFDsinCantor*0994 $291,31810/17/20131:14pmJaspenbuysAlignCFDsinCantor*0011 $410,69310/17/20131:15pmConcordebuysAlignstockinInteractiveBrokers $532,323*135810/17/20131:22pmDubovoyGroupbuysAlignstockinBeratto $114,393Group'sAPX*503810/17/20131:34pmDubovoyGroupbuysAlignstock inArkadiy 1:43pm $96,942Dubovoy'sMerrillLynch*907810/17/2013 JaspenbuysAlignCFDsinSAXO*INET 1:56pm $114,90010/17/2013 2:25pm Intertrade(Amaryan)buysAlignstockinInteractive $126,136Brokers*828410/17/2013 Escada(Slepenkov)buysAlignstockinInteractive 2:26pm $243,869Brokers*280610117/2013 OceanPrime(Amaryan)buysAlignstockin $375,599InteractiveBrokers*982710/17/20132:27pm2:29pm BeringbuysAlignCFDsinCantorFitzgerald*969 $357,05810/17/2013 DubovoyGroupbuysAlignstockinKorchevsky's 2:36pm $252,609JPMorgan*0336" DubovoyGroupbuysAlignstockinKorchevsky's 2:36pm $336,410E*Trade*662310/17/201310/17/2013DubovoyGroupbuysAlignstockinArkadiy 2:55pm $406,296Dubovoy'sFidelity*6216--,"----> DubovoyGroupbuysAlignstockinArkadiy $190,543Dubovoy'sE*Trade*698710/17/201310/17/2013 3:05pmDubovoyGroupbuysAlignstockinStrawOwner 3:17pm $38,9723'sInteractiveBrokers*834810/17/2013 DubovoyGroupbuysAlignstockinKorchevsky's 3:17pm $58,703Fidelity*471610/17/2013 ExantebuysAlignstockinLEKaccount $48,22510/17/20133:27pmMemellandbuysAlignstockinInteractiveBrokers $40,537*279910/17/20133:46pmNewswireService1distributesAlign's3Qearningsreleasetothepublic4:00pm215. ThepriceofAlignstockrose$12.05pershareafterthenewswasannounced.216. Withthebenefitofthestolenmaterialnonpublicinformation,all of thedefendantswhotradedinAlignsecuritiesduringthewindowbetweenuploadof theearningsreleaseanditspublicationtradedinamannerexpectingthepriceof thestocktoincreasewhenthenewswaspublished.54 217. Allofthesedefendantsprofited. TheDubovoyGroupcollectivelyrealizedover$1.5millioninill-gottengains. AndtheForeignTraderdefendantscollectivelyrealizedover$2.5millioninill-gottengains.The Defendants RealizedOver $100 Million From The Fraudulent Scheme 218. Defendantsengagedinalong-running,deceptiveschemeto stealmaterialnonpublicinformationfromtheNewswireServicesandusethatinformationtogainanillegaladvantageinthemarkets. Defendantsrealizedover$100millionfromtheirscheme.219. Boththehackingandthetradingwereessentialtothescheme. Asaresult,theschemeoscillatedbetweenNewswireServices,asthehackerdefendants' accessedebbedandflowed.220. Foreachillicittrade,defendantstradedonthebasisofmaterialnonpublicinformation.221. AtalltimesrelevanttothisComplaint,defendantsactedknowinglyand/orrecklessly. Inaddition,defendantsattemptedto concealtheirconductfrom detectioninavarietyof ways,suchas: usingcomputertechnologytohidetheirtrueidentities,poseasotherstoaccesstheNewswireServices'computersystems,anddeleteevidenceoftheirillegalintrusionsandtheiraccessto stolenreleases;usingaliasesand"handles"tohidetheirtrueidentity;usingasecret,securewebserverto disseminateandretrievethestolenpressreleases; spreadingtheirillicittradingacrossnumerousaccountsatmultiplebrokeragesandinaplethoraof namesofbothindividualsandentities;andtransmittingfundsunderfraudulentpretensesto entitiesestablishedforthepurposeof receivingthosefunds.55 FIRSTCLAIMFORRELIEF ViolationsofSection17(a)oftheSecuritiesAct (Againstalldefendants) 222.- TheCommissionreallegesandincorporatesbyreferenceeachandeveryallegationinparagraphs 1through221, inclusive,asiftheywerefullysetforthherein.223. Defendants,byengagingintheconductdescribedabove,knowinglyorrecklessly,inconnectionwiththeofferorsaleofsecurities,bytheuseofthemeansorinstrumentsoftransportation,orcommunicationininterstatecommerceorbyuseof themails,directlyorindirectly:(a) employeddevices,schemesorartificestodefraud;(b) obtainedmoneyorpropertybymeansof untruestatementsofmaterialfacts, oromissionstostatematerialfactsnecessaryinordertomakethestatementsmade,inlightofthecircumstancesunderwhichtheyweremade,notmisleading;and/or(c) engagedintransactions,practicesorcoursesofbusinesswhichoperatedorwouldoperateasafraud ordeceituponthepurchaser.224. Byengagingintheforegoingconduct,defendantsviolated,andunlessenjoinedwillcontinuetoviolate,Section17(a)oftheSecuritiesAct[15 U.S.C. 77q(a)].56 SECONDCLAIMFORRELIEF ViolationsofSection lO(b)oftheExchangeActandRule lOb-SThereunder(Againstalldefendants)225. TheCommissionreallegesandincorporatesbyreferenceeachandeveryallegationinparagraphs 1through224,inclusive,asif theywerefullysetforthherein.226. Byengagingintheconductdescribedabove,defendantsknowinglyorrecklessly,inconnectionwiththepurchaseorsaleofsecurities,directlyorindirectly,byusethemeansorinstrumentalitiesofinterstatecommerce,orthemails,orthefacilitiesof anationalsecuritiesexchange:(a) employeddevices,schemesorartificesto defraud;(b) madeuntruestatementsof materialfacts oromittedtostatematerialfactsnecessaryinordertomakethestatementsmade,inlightofthecircumstancesunderwhichtheyweremade,notmisleading;and/or(c) engagedinacts,practices,orcoursesof businesswhichoperatedorwouldoperateasafraudordeceituponanypersoninconnectionwiththepurchaseorsaleof anysecurity.227. Byengagingintheforegoingconductdefendantsviolated,andunlessenjoinedwillcontinueto violate,Section IO(b)oftheExchangeAct[15 U.S.C. 78j(b)] andRule lOb-5[17C.F.R. 240.10b-5],thereunder.57 THIRDCLAIMFORRELIEF ViolationsofSection20( e)oftheExchangeAct (AgainstalldefendantsexceptIeremenkoandTurchynov) 228. TheCommissionreallegesandincorporatesbyreferenceeachandeveryallegationinparagraphs 1through227,inclusive,asiftheywerefullysetforthherein.229. Asallegedabove,thehackerdefendantsviolatedSection17(a)of theSecuritiesAct[15 U.S.C. 77q(a)],Section IO(b) oftheExchangeAct[15 U.S.C. 78j(b)] andRule lOb-5[17C.P.R.240.10b-5],thereunder,asallegedinthisComplaint.230. Throughtheirillicittrading,paymentstothehackerdefendants,instructionaboutwhichreleasestoobtain,andothermeansallegedinthisComplaint,thetraderdefendantsknowinglyprovidedsubstantialassistanceto,andtherebyaidedand b e t t e d ~ thehackerdefendantsinconnectionwiththehackerdefendants'violationsofthesecuritieslaws.231. Byengagingintheforegoingconduct,pursuantto Section15(b)oftheSecuritiesActandSection20(e)oftheExchangeAct,defendants,exceptIeremenkoandTurchynov,violated,anunlessenjoinedwillcontinuetoviolateSection17(a)oftheSecuritiesAct[15U.S.C. 77q(a)] andSection 10(b)oftheExchangeAct[15 U.S.C. 78j(b)]andRule 10b-5 [17C.F.R. 240.10b-5],thereunder.FOURTHCLAIMFORRELIEF ViolationsofSection20(b)oftheExchangeAct (AgainstalldefendantsexceptIeremenkoandTurchynov) 232. TheCommissionreallegesandincorporatesbyreferenceeachandeveryallegationinparagraphs 1through231,inclusive,asiftheywerefullysetforthherein.58 233. Byengagingintheforegoingconduct,thetraderdefendantsviolatedSection10(b)oftheExchangeAct[15U.S.C. 78j(b)] andRule lOb-5 [17C.F.R. 240.10b-5],thereunderthroughorbymeansof thehackerdefendants.234. Byengagingintheforegoingconduct,pursuantto Section20(b)oftheExchangeAct[15 U.S.C. 78t(b)],defendants,exceptIeremenkoandTurchynov,violated,anunlessenjoinedwillcontinuetoviolateSection10(b)oftheExchangeAct[15 U.S.C. 78j(b)]andRule1 Ob-5 [17C.F.R. 240.1Ob-5], thereunderPRAYER FOR RELIEF WHEREFORE, theCommissionrespectfullyrequeststhatthisCourtenteranemergency,temporary,andpreliminaryorderfreezingtheassetsof thosedefendants' subjecttothemotionforatemporaryrestrainingorderandpreliminaryinjunction,includingbutnotlimitedtobrokerageaccountsandbankaccounts(bothknownandunknown),requiringthosedefendantstorepatriateamountsequaltotheirtheill-gottengainsderivedfromthescheme,asallegedinthisComplaint,prohibitingthedestructionof documents,andorderingalternativemeansofservices.Further,theCommissionrespectfullyrequeststhattheCourtenterafinaljudgment:I. Permanentlyrestrainingandenjoiningdefendantsfrom, directlyorindirectly,violatingSection17(a)oftheSecuritiesAct[15 U.S.C. 77q(a)],and Section10(b)of theExchangeAct[15U.S.C. 78j(b)]andRule lOb-5 thereunder[17C.F.R. 240.10b-5];II. Orderingeachdefendanttodisgorgeallill-gottengainsorunjustenrichmentderivedfromtheactivitiessetforthinthisComplaint,togetherwithprejudgmentinterestthereon;59 III.OrderingeachdefendanttopayacivilpenaltyuptothreetimestheprofitsmadepursuanttoSection21Aof theExchangeAct[15 U.S.C. 78u-l]or,alternatively,topayacivilpenaltyunderSection21(d)of theExchangeAct[15 U.S.C. 78u(d)];IV.GrantingsuchotherandfurtherreliefasthisCourtmaydeemjust,equitable,ornecessaryin connectionwiththeenforcementofthefederalsecuritieslawsandfortheprotectionofinvestors.By:-----:r.l-"-=-------'-----=-r:t'--'L--/t /hvidAxelrodi/KellyGibsonJohnDom1ellyAttorneysforPlaintiffSECURITIESANDEXCHANGECOMMISSIONPhiladelphiaRegionalOffice1617JFKBoulevard,Suite520Philadelphia,PA 19103Telephone: (215)597-3100Facsimile:(215)597-2740OfCounsel:JosephSansoneDate: August10,201560 UNITEDSTATESDISTRICTCOURT DISTRICTOFNEWJERSEY SECURITIESANDEXCHANGECOMMISSION,CaseNo.Plaintiff,DESIGNATIONOFAGENTv.FORSERVICEARKADIYDUBOVOY,etal.,Defendants.Pursuantto LocalRule 101.1(f), becausetheSecuritiesandExchangeCommission(the"Commission")doesnothaveanofficeinthisdistrict,theUnitedStatesAttorneyfortheDistrictofNewJerseyisherebydesignatedaseligibleas analternativetotheCommissiontoreceiveserviceofallnoticesorpapersinthecaptionedaction. Therefore,serviceupontheUnitedStatesoritsauthorizeddesignee,LeticiaVandehaar,DeputyChief,CivilDivision,UnitedStatesAttorney'sOfficefortheDistrictofNewJersey,970BroadStreet,7thFloor,Newark,NJ07102shallconstituteserviceupontheCommissionforpurposesofthisaction.Respectfullysubmitted,s/JohnDonneUyDavidAxelrodKellyGibsonJohnDonnellyAttorneysforPlaintiffU.S. SecuritiesandExchangeCommissionPhiladelphiaRegionalOffice1617JFKBoulevard,Suite520Philadelphia,PA 19103(215)597-3100DonnellvJ@sec.govAugust10,201561