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Vadym Iermolovych, a Ukrainian national who admitted helping steal unpublished corporate press releases from three newswire services, was sentenced in federal court in Newark on May 22, 2017, to 30 months in prison. The court also ordered three years of supervised release and $3,004,685.06 in restitution. Prosecutors said the wider hacking-and-trading scheme generated about $30 million in illegal profits.
What Iermolovych was sentenced for
Iermolovych was 29 and from Kyiv when U.S. District Judge Madeline Cox Arleo imposed the sentence. He pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. The case concerned theft of draft corporate announcements—not a general customer database—and the use of market-sensitive information before it became public.
The sentence and restitution are specific to Iermolovych. The approximately $30 million figure was attributed by prosecutors to the broader conspiracy; it should not be read as money he personally made or as an amount recovered. The Justice Department’s sentencing announcement lists the prison term, supervised release, and restitution.
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Why draft press releases could move markets
Companies use newswire services to distribute announcements to investors and the public. Before release, a draft may contain earnings, revenue, gross margins, acquisition details, or other information likely to affect a company’s share price. Once public, that information is available to the market; in advance, it is material nonpublic information.
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The alleged advantage was timing. Traders who saw a release before its scheduled publication could buy or sell securities before other investors had the same information. Prosecutors said trading sometimes followed shortly before an announcement went public. The trading was described as insider trading, but the alleged advantage did not depend on the traders being company insiders: it came from information stolen from intermediaries handling corporate releases.
How the operation worked
The newswire companies targeted were Marketwired L.P., PR Newswire Association LLC, and Business Wire. The alleged chain was:
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- Companies provided draft announcements to the newswire services for distribution.
- Hackers gained access to newswire networks and copied releases before publication.
- The stolen information was transferred through overseas servers to traders.
- Traders used the information to make securities trades ahead of public release.
- Participants shared proceeds, with prosecutors describing the use of foreign shell companies in the wider operation.
According to Iermolovych’s guilty plea and government court filings, he hacked PR Newswire’s network between January and March 2013. He obtained employee credentials that had been stolen in a separate intrusion at a social-networking website, then used at least one credential to enter PR Newswire’s network. He was also personally involved in intrusions affecting Marketwired, sold stolen Marketwired releases, and purchased access to Business Wire’s network as part of the broader conspiracy. These are accounts from his admissions and the government’s filings, not a claim that he alone carried out every intrusion or trade.
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Scale of the alleged scheme
In its charging materials, the government said the group stole approximately 150,000 confidential press releases and traded ahead of more than 800 of them. The 2017 sentencing announcement put the wider scheme’s illegal profits at approximately $30 million. Those figures describe different things: releases allegedly copied, releases allegedly used for advance trading, and estimated profits. They do not mean that every stolen release was traded or that Iermolovych personally received the full profit amount.
The releases concerned hundreds of publicly traded companies. Prosecutors cited companies including Align Technology, Caterpillar, Hewlett Packard, Home Depot, Panera Bread, and Verisign. Their inclusion in the case materials does not establish that each company was affected in the same way or involved in every part of the scheme. The 2015 charging announcement provides the release counts and describes the broader allegations.
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A wider network, not a lone hacker
Prosecutors described the operation as an international conspiracy involving hackers and traders. The related New Jersey indictment charged five other members: Ivan Turchynov, Oleksandr Ieremenko, Pavel Dubovoy, Arkadiy Dubovoy, and Igor Dubovoy. The 2015 announcement said nine people were charged across two indictments in New Jersey and Brooklyn. Those charging figures establish the scope of the prosecution at that point; they do not, by themselves, establish the later outcome of every defendant’s case.
Prosecutors characterized the operation as the largest known computer-hacking and securities-fraud scheme of its kind at the time. That is a time-specific description from the government, not an unqualified claim that it remains the largest ever.
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Timeline and a related case that should not be confused with this sentence
- January–March 2013: The period during which Iermolovych admitted hacking PR Newswire’s network.
- 2015: Federal prosecutors announced indictments in the broader newswire hacking-and-trading scheme.
- May 22, 2017: Iermolovych was sentenced in Newark to 30 months in prison, three years of supervised release, and restitution.
A later federal case concerned alleged hacking of the SEC’s EDGAR filing system. It involved a distinct phase of activity and should not be treated as the conduct for which Iermolovych received this 2017 sentence. The Justice Department’s announcement of the later EDGAR case describes that separate prosecution.
Contemporaneous reporting said a government spokesman expected Iermolovych might be deported after release because he was a foreign national. Deportation was not one of the terms in the Justice Department’s published sentencing summary, and that report does not confirm that deportation occurred. Nor does the restitution order alone show how much was ultimately paid or recovered.
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