(HedgeCo.Net) The Securities and Exchange Commission has announced settlements with Sungjin Cho, Ivan Olefir, and Capyield Systems, Ltd., an entity controlled by Olefir, who were charged with trading on nonpublic corporate earnings information hacked from the SEC’s EDGAR system.

According to the SEC’s complaint, Cho, Olefir, Capyield, and six other defendants participated in a scheme to hack into EDGAR and extract material nonpublic information to use for illegal trading. The complaint alleged that a Ukrainian hacker gained access in 2016 and extracted EDGAR files containing nonpublic earnings results. From July to October 2016, Cho, Olefir, and Capyield allegedly traded on the basis of this hacked information in the narrow window of time between when the files were extracted from EDGAR and when the information was released to the public. They also allegedly previously traded based on material nonpublic information obtained through the hack of at least two newswire services.

Cho, Olefir and Capyield consented to the entry of final judgments that would permanently enjoin them from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Additionally, Cho and Olefir agreed to conduct-based injunctions limiting their ability to trade U.S.-listed securities and derivatives. Cho agreed to pay a civil penalty of $175,000, and Olefir and Capyield agreed to pay a joint and several penalty of $250,000. The SEC will also move to dismiss its case against relief defendant Kyungja Cho, whose trading in the scheme was directed by Sungjin Cho. The settlements are subject to court approval.