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Links of Insider Trading Scam Mastermind to Russian President Vladimir Putin Raises Eyebrows

The prosecution argued that Klyushin, along with four co-conspirators, systematically pilfered earnings information from hundreds of publicly traded companies listed on Nasdaq and the New York Stock Exchange
Cover Image Source: GettyImages/Photo by Mikhail Svetlov
Cover Image Source: GettyImages/Photo by Mikhail Svetlov

In a cybercrime case that has sent shockwaves across the global political as well as financial landscape, Vladislav Klyushin, a Russian businessman with close ties to President Vladimir Putin, has been found guilty of participating in a $90 million insider trading scam. The conviction, delivered on Tuesday after a 10-day trial in Boston, exposed Klyushin's involvement in a sophisticated operation that involved stealing confidential information from U.S. companies by hacking their systems.

The charges against Klyushin, 43, included conspiracy, wire fraud, and other offenses, carrying a maximum prison sentence of more than 50 years. The prosecution alleged that Klyushin, along with four co-conspirators, systematically pilfered earnings information from hundreds of publicly traded companies including Roku, Snap and Tesla, listed on Nasdaq.

U.S. Attorney for Massachusetts Rachael Rollins emphasized the severity of Klyushin's actions, presenting him as a cybercriminal and a cheat to the jury, and added that he repeatedly gamed the system and finally got caught.

Getty Images | Photo by Dennis Grombkowski
Getty Images | Photo by Dennis Grombkowski

Klyushin was arrested in March 2021 when he, along with his family, was flying in a private jet to Switzerland for a ski vacation. He was detained in Switzerland until his extradition to Boston in January 2022. Despite attempts by his lawyer, Oliver Ciric, to halt the extradition, calling insider trading charges disingenuous, the court proceeded with the case.

Ciric's defense highlighted Klyushin's company, M-13, which reportedly held government contracts in Russia, including with national intelligence agencies. Klyushin's ties to the Russian government were evident on the company's website, and US officials further underscored Klyushin's proximity to President Putin.

The prosecution alleged that M-13, Klyushin's company, provided services that identified vulnerabilities in computer systems, which could be exploited using hacking techniques. The company's website explicitly mentioned providing "IT solutions" to the administration and government of the Russian Federation. This revelation raises concerns about the intersection of cybercrime, state-sponsored cyber attacks, and financial market manipulation.

Pixabay | Pexels
Pixabay | Pexels

Apart from Klyushin, four other Russian nationals involved in the insider trading scheme remain at large, including Ivan Ermakov, previously charged in connection with the 2016 hacking of the Democratic National Committee. Ermakov faces additional charges in Pittsburgh related to hacking and disinformation operations attributed to the Russian government targeting international anti-doping agencies and officials.

The conviction of Klyushin sheds light on the increasing sophistication of cybercriminals and their ability to manipulate financial systems for personal gain, posing significant challenges for law enforcement and regulatory bodies worldwide. As technology continues to evolve, the battle against such cyber threats becomes a crucial aspect of maintaining the integrity of global financial markets.