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NEW YORK (Reuters) - A Georgia man pleaded guilty on Tuesday to trading on inside information that authorities say was obtained by hackers through a worldwide scheme to steal information from services that distribute corporate news releases.
Leonid Momotok, 48, pleaded guilty in federal court in Brooklyn to one count of conspiracy to commit wire fraud, for his role in an alleged scheme that involved the theft of more than 150,000 unpublished press releases from Business Wire, Marketwired and PR Newswire.
Momotok, a Russian-born naturalized U.S. citizen who according to court records lives in Suwanee, Georgia, and works in construction, admitted to having executed trades based on information about certain stocks passed by Ukrainian hackers.
"I profited from these trades," Momotok told U.S. Magistrate Judge Ramon Reyes. "It was a bad judgment. I am very sorry."
Under a plea agreement, Momotok agreed to not appeal any prison sentence of nine years or fewer. He is scheduled to be sentenced on Dec. 9.
Momotok is among 10 defendants including traders and Ukrainian hackers who have been criminally charged since August 2015, when he and four other individuals were arrested.
"Using non-public press releases stolen by overseas hackers, Momotok and his group of traders engaged in a brazen scheme that was unprecedented in its scope, impact and sophistication," U.S. Attorney Robert Capers in Brooklyn said in a statement.
The U.S. Securities and Exchange Commission has separately civilly charged more than 40 people and entities for their roles in the scheme, which it said resulted in more than $100 million of illegal profit from 2010 to 2015.
Authorities said that traders, including many with ties to Russia, gave hackers "shopping lists" of releases they wanted to see in advance, including quarterly results of public companies.
Prosecutors have said Momotok made at least $1.2 million in illegal profits, executing trades in advance of news involving Panera Bread Co and DealerTrack Technologies Inc.
Four other people have pleaded guilty to charges pending in Brooklyn and New Jersey, including three traders who like Momotok were arrested in August 2015.
Charges remain pending against a fifth trader also arrested in August, Vitaly Korchevsky, a Morgan Stanley alumnus and hedge fund manager who is now a pastor in Pennsylvania. He has pleaded not guilty.
Business Wire is a unit of Warren Buffett's Berkshire Hathaway Inc. PR Newswire is a unit of Chicago-based Cision. Marketwired is owned by Nasdaq Inc.
The case is U.S. v. Korchevsky et al, U.S. District Court, Eastern District of New York, No. 15-cr-00381.
Reporting by Nate Raymond in New York; Editing by Bernard Orr