Foreign National and American Trader Settle Fraud Charges in EDGAR Hacking Case

The Securities and Exchange Commission today announced settlements with David Kwon and Igor Sabodakha, two traders who allegedly profited from trading on nonpublic corporate earnings information hacked from the SEC’s EDGAR system. The settlement agreements are subject to court approval. According to the SEC’s complaint, Kwon, of California, Sabodakha, of Ukraine, and seven other defendants participated in a scheme to hack into EDGAR and extract material, nonpublic information to use for illegal trading. The complaint alleged that a Ukrainian hacker extracted EDGAR files containing nonpublic earnings results. Kwon and Sabodakha allegedly traded on the basis of this hacked information in the narrow window of time between when the files were extracted from EDGAR and when the information was released to the public.