Complaint Filed in Data Theft Scheme
An investment bank in Estonia and two of its employees made at least $7.8 million by infiltrating a secure website operated by Business Wire Inc. to trade on news before it was announced, a government regulator charged in court papers Tuesday.
Lohmus Haavel & Viisemann and two of its employees, Oliver Peek and Kristjan Lepik, had been engaged in the scheme since January, according to a civil complaint filed in U.S. District Court in New York by the Securities and Exchange Commission.
The SEC alleged that the defendants used early access to more than 360 confidential press releases issued by more than 200 U.S. public companies to get a jump on others who would want to trade on the information.
As a result, it said, the defendants almost always turned a profit, trading before the information was released publicly and again afterward.
The SEC asked the court to permanently block the defendants from engaging in the trading scheme and to force them to pay back profits and interest.
SEC attorney Daniel M. Hawke said the SEC had shut down all accounts that were used in the scheme and the defendants were being served the complaint. He said he did not know whether they had lawyers.
The SEC said the investment bank, established in the Estonian capital of Tallinn in 1999, provides corporate financing, private equity, asset management and investment services to the Eastern European market.
Peek, 24, and Lepik, 28, both live in Tallinn. The SEC indicated in court papers that it traced the scheme to the defendants after noticing that 105,000 shares of an unidentified company were purchased in an account traced to Peek the day before a merger was announced June 24.
