NEW YORK (Reuters) – A former hedge fund manager who also worked as a pastor was sentenced on Thursday to five years in prison after being convicted of insider trading on non-public corporate press releases stolen by computer hackers.
FILE PHOTO – Former hedge fund manager Vitaly Korchevsky leaves Brooklyn Federal Court in the Brooklyn borough of New York, January 8, 2016. REUTERS/Brendan McDermid
Vitaly Korchevsky, 53, was sentenced by U.S. District Judge Raymond Dearie in Brooklyn after being convicted by a jury last July on two securities fraud counts and three conspiracy counts.
The judge also fined Korchevsky $250,000 and ordered the Glen Mills, Pennsylvania, resident, who was born in Kazakhstan, to forfeit $14.4 million.
Korchevsky was among 10 people, including seven traders and three Ukraine-based hackers, criminally charged in Brooklyn and New Jersey over the theft of more than 150,000 press releases from Business Wire, Marketwired and PR Newswire that had yet to be made public from February 2010 to August 2015.
Authorities said traders reaped more than $100 million from the stolen information, in the largest known hacking scheme to game U.S. financial markets.
Vladislav Khalupsky, a securities broker, was also convicted at Korchevsky’s trial on the same charges. He was sentenced on Jan. 11 to four years in prison.
“Korchevsky and Khalupsky will now pay the price for using their experience as traders to generate millions of dollars in unlawful trades based on hacked information,” U.S. Attorney Richard Donoghue in Brooklyn said in a statement.
Korchevsky had been a Morgan Stanley vice president several years before the scheme began.
Prosecutors had requested an eight-year prison term. The defense said leniency was warranted, citing Korchevsky’s work as a pastor and the sentences imposed on comparable defendants.
“We are thankful that the judge recognized Mr. Korchevsky’s lifetime of good deeds and exceptional character when imposing sentence,” Korchevsky’s lawyer Steven Brill said in an email.
Business Wire is owned by Warren Buffett’s Berkshire Hathaway Inc, PR Newswire is owned by Cision Ltd, and Marketwired is owned by West Corp.
None of the news wires was accused of wrongdoing. Cision is exploring a sale of PR Newswire, Reuters reported on March 4.
U.S. authorities on Jan. 15 charged Oleksandr Ieremenko, one of the suspected hackers, in a separate scheme to trade on corporate news stolen from the U.S. Securities and Exchange Commission’s Edgar database. He remains at large.
The case is U.S. v. Korchevsky et al, U.S. District Court, Eastern District of New York, No. 15-cr-00381.
Reporting by Jonathan Stempel in New York; Editing by Dan Grebler