back to article Russian crook made $90M exploiting stolen info on Tesla, Roku, Avnet, Snap, more

A Russian national with ties to the Kremlin exploited stolen upcoming financial filings belonging to hundreds of companies to help him and his associates net more than $90 million. A US federal jury in Boston on Tuesday found Vladislav Klyushin – who owned an IT biz based in Moscow called M-13 – guilty of wire and securities …

  1. tiggity Silver badge

    evidence free

    Obviously they may well have been guilty, but I'm generally unhappy about evidence free convictions (as, there was no mention of any proof they "hacked" financial data) - a bit like the appropriate US classic quote "it is better a hundred guilty persons should escape than one innocent person should suffer.".

    Although big companies usually ban employees from discussing financially / commercially sensitive data its quite easy to get a general vibe about a company from social media if you have the info to connect a decent number of accounts to a particular company (which would tally with only trading in a small number of companies as a lot of hard "legwork" involved).

    e.g. if you see post(s) about reduced work related travel then could be a hint of cost cutting & potentially sign of a "dip".

    whereas if you see some sales folk bragging about smashing their targets / expecting a big juicy bonus, then you might gamble the company is on the up.

    .. and that's without inferences from other press coverage (e.g. you don't have to be a financial wizard to guess Twitter might not be the best choice of stock to invest in).

    Then there's more nebulous stuff like looking at peoples LinkedIn profiles and trying to gauge their level of enthusiasm for their current role (obviously this can be affected by factors other than how well company is doing, if someone's PHB is a total **** then you may spot a lack of enthusiasm despite that company doing really well) .. back in the day when I used LinkedIn to communicate with some ex colleagues, it was certainly possible to gauge how content they were in their role just on a quick read of their public LinkedIn content.

    So, their defence is reasonable, IMHO.

    1. Anonymous Coward
      Anonymous Coward

      Re: evidence free

      I would suspect that there was evidence shown to the judge and or jury that wasn’t mentioned in the article. That evidence may have included logs for the compromised employee logins and IP addresses for the remote access. The fact that these people were right on the money far more often than they were wrong raises suspicions. Very few people are correct about company earnings every time and to do so raises large red flags. Same as you get if playing in a casino and consistently winning, they will start to take an interest in you. In Vegas back in the day you really didn’t want them doing that. As the statistician for the SEC pointed out their constant success was bloody unlikely. I find it very hard to believe that they managed to consistently beat the market just looking at LinkedIn and social media posts and making inferences. You might be able to do it once or twice getting it right but more than that is doubtful and improbable.

      To quote a friend “If your method is guaranteed to succeed why aren’t you using it.” Why haven’t you made vast amounts looking at social media and gambling on earnings reports pushing stocks higher or lower?

    2. Michael Wojcik Silver badge

      Re: evidence free

      it is better a hundred guilty persons should escape than one innocent person should suffer

      Blackstone's Ratio, though Blackstone set it at 10:1. Blackstone was English; his Commentaries was (maybe still is) a hugely influential work, because as so much of Common Law is uncodified, it's important for judges to learn about precedents and the rationale behind them.

      (How influential? I studied it in a literature seminar, because Blackstone's ideas and formulations even influenced a lot of popular literature in Early Modern England. And he discusses concepts that were significant earlier, so for example if you're reading Arden of Faversham – and who hasn't? – Blackstone's explanation of the evolution of jurists' interpretation of petty treason is illuminating.)

      Anyway, on to your main point: I'm always careful to second-guess juries, because I wasn't there; but I agree that per the description in the article, this sounds like the prosecution had a weak case and quite possibly prejudice played a significant role. (We can disregard the Grand Jury's indictment, because indicting Grand Juries return an indictment in the vast majority of cases. They're an almost negligible check on prosecutorial power, unfortunately.)

    3. JimboSmith Silver badge

      Re: evidence free

      Obviously they may well have been guilty, but I'm generally unhappy about evidence free convictions (as, there was no mention of any proof they "hacked" financial data) - a bit like the appropriate US classic quote "it is better a hundred guilty persons should escape than one innocent person should suffer.".

      Although big companies usually ban employees from discussing financially / commercially sensitive data its quite easy to get a general vibe about a company from social media if you have the info to connect a decent number of accounts to a particular company (which would tally with only trading in a small number of companies as a lot of hard "legwork" involved).

      e.g. if you see post(s) about reduced work related travel then could be a hint of cost cutting & potentially sign of a "dip".

      whereas if you see some sales folk bragging about smashing their targets / expecting a big juicy bonus, then you might gamble the company is on the up.

      .. and that's without inferences from other press coverage (e.g. you don't have to be a financial wizard to guess Twitter might not be the best choice of stock to invest in).

      Then there's more nebulous stuff like looking at peoples LinkedIn profiles and trying to gauge their level of enthusiasm for their current role (obviously this can be affected by factors other than how well company is doing, if someone's PHB is a total **** then you may spot a lack of enthusiasm despite that company doing really well) .. back in the day when I used LinkedIn to communicate with some ex colleagues, it was certainly possible to gauge how content they were in their role just on a quick read of their public LinkedIn content.

      So, their defence is reasonable, IMHO.

      Could you please explain that stuff about scouring social media to my wealth manager who then might do a bit better than he has of late.

      CNN reports that

      Klyushin wrote to Ermakov, whom the Justice Department describes as a now-former GRU officer, in May 2019 describing the nearly $1 million in profits the scheme had netted for one account over the previous seven months, according to a federal indictment.

      https://edition.cnn.com/2023/02/14/politics/russia-us-jury-klyushin-convicted-insider-trading/index.html

      And the Massachusetts District Attorney says:

      Evidence presented at trial demonstrated that the times in which the filing agents were hacked corresponded with the times in which Klyushin and his co-conspirators made profitable trades. Additionally, of the more than 2,000 earnings events around which Klyushin and his co-conspirators traded between January 2018 and September 2020, more than 97 percent were filed with the SEC by the victim filing agents. Testimony at trial indicated that the odds of this trading pattern occurring in the absence of a relationship between the trading and the identity of the filing agent was less than one in a trillion.

      https://www.justice.gov/usao-ma/pr/russian-businessman-found-guilty-90-million-hack-trade-conspiracy

      So the prosecution do appear to have other evidence and it’s not just that the bloke and his mates was good at guessing

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like