2 years ago
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The Securities and Exchange Commission has charged Apostolos Trovias with perpetrating a fraudulent scheme to sell what he called “insider trading tips” on the Dark Web.
From at least December 2016 through early 2021, the Greek man, operating under the pseudonym “TheBull”, engaged in a deceptive scheme to offer and sell so-called “insider trading tips” on Dark Web marketplaces to purchasers whom Trovias offered an unfair advantage for trading securities in the public markets.
He claimed that he was selling order-book data from a securities trading firm that was provided to Trovias by an employee of the firm.
Trovias allegedly sold those “tips” through one-off sales, as well as weekly and monthly subscriptions. Trovias allegedly sold over 100 subscriptions to investors via the Dark Web over the course of the scheme.
The complaint alleges that, in addition to order-book information, Trovias sold the pre-release earnings reports of publicly traded companies.
The defendant acknowledged to federal authorities that this information was “sensitive and more importantly illegal to use or share.”
The Dark Web facilitates anonymity by obscuring users’ identities, thus allowing users to purchase and sell illegal products and services.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said: “Trovias’s alleged conduct was an attempt to evade detection by operating in obscure online forums. As this case demonstrates, the SEC will continue to target misconduct wherever it occurs and regardless of perpetrators’ efforts to hide their tracks.”
Trovias was charged with violating the antifraud provisions of the federal securities laws. The Southern District of New York AG has filed criminal charges against him, in a parallel action.
The SEC’s first enforcement action involving alleged securities violations on the dark web saw the light of day in March 2021. James Roland James was charged with selling what he called “insider tips” on the dark web.
The alleged fraudulent scheme started in late 2016 and lasted for nearly a year. Mr. Jones accessed various dark web marketplaces, including an “insider trading forum”, in search of material for his own securities trading.
In order to gain access, Mr. Jones lied about possessing material, nonpublic information. His time inside the forum didn’t last long and he was unsuccessful in obtaining valuable material, but then he devised a scheme to sell purported insider tips to others on the dark web, the complaint alleges.
The SEC argued that James Roland Jones “offered and sold on one of the dark web marketplaces various purported “insider tips” that he falsely described as material, nonpublic information from the insider trading forum or corporate insiders”.
The complaint alleges several users paid Bitcoin to purchase Mr. Jones’ tips and ultimately traded based on his false information.
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