IT Insider Helped Alleged $5m Insider Trading Scheme

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Five men have been charged with insider trading offenses after an IT consultant pleaded guilty to using his position as a trusted insider at an investment bank to facilitate the scam.

In his role at the unnamed bank, Daniel Rivas is said to have accessed sensitive M&A information from at least August 2014 to around April 2017, sending it to friends on more than 50 occasions for them to buy and sell securities.

His efforts netted them an estimated $5m.

Rivas first sent insider information to the father of his girlfriend, a James Moodhe of New York City, which he used to generate profits of $2m over three years.

The two have already pleaded guilty to conspiracy, securities fraud, fraud in connection with a tender offer, wire fraud and making false statements to law enforcement officials.

A separate SEC civil case reveals that Rivas tried to use his IT know-how to his advantage:

“To avoid leaving a trail of their communications, Rivas and Moodhe did not communicate through electronic means such as phone calls, text messages, or emails. Instead, Rivas tipped Moodhe through other methods. For instance, Rivas provided handwritten notes to Moodhe’s daughter.”

Rivas also passed information to Michael Siva, 55, of West Orange, New Jersey, a financial adviser; Roberto Rodriguez, 32, of Miami Gardens; Rodolfo Sablon, 37, of Miami; Jhonatan Zoquier, 33, of Englewood, New Jersey and Jeffrey Rogiers, 33, of Oakland, California.

“As alleged, the defendants took advantage of an insider at an investment bank to make millions in illegal profits, trading over 50 times in advance of confidential corporate information. The defendants allegedly used code words and encrypted messages to try to avoid law enforcement detection,” said acting US attorney, Joon Kim.

“But despite their efforts to hide their crimes, the defendants’ insider trading schemes have been exposed, and two have already pled guilty federal crimes. Those who seek to cheat the markets by trading on stolen inside information corrupt the integrity of our nation’s securities markets, and we are committed to stopping them and holding them accountable.”

New research from Dtex out this week revealed that IT pros overwhelmingly believe insider threats are more difficult to spot than attacks from third parties, and over half (51%) think such incidents are on the rise.  

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