On Monday, the SEC announced that the U.S. District Court for the Southern District of New York granted its motion for summary judgment against Oleksandr Dorozhko. The Court also ordered Dorozhko to to pay approximately $580,000 in disgorgement, prejudgment interest, and a civil penalty.
According to the SEC, the Ukranian citizen allegedly hacked into a computer system and traded IMS Health Incorporated securities based on the stolen information. The SEC alleges that Dorozhko purchased 630 put options on IMS’ common stock just minutes before IMS’s earnings release. Reuters reports that IMS’ stock dropped 28% the next day, which allowed Dorozhko to make a $287,346 profit by selling the put options.
In July 2009, the Second Circuit reversed a lower court that had ruled that computer hacking was not “deceptive” within the meaning of Section 10(b) as defined by the Supreme Court.