Federal prosecutors and attorneys on Friday charged a man with securities fraud for allegedly selling insider stock information on the dark web site AlphaBay. The defendant also sold information through multiple criminal marketplaces and through an encrypted messaging platform.
In an indictment filed in federal court in the Southern District of New York, Department of Justice prosecutors alleged that Apostolos Trovias, 30, of Athens, Greece, created an account on AlphaBay in 2016 and used it to advertise and sell stock tips until the dark web criminal marketplace was shut down the following year. Prosecutors said that using the pseudonym “The Bull,” Trovias sold the tips both individually and as weekly or monthly subscriptions, using Bitcoin to receive payments.
Behind the dark web veil
“Behind the veil of the Dark Web, using encrypted messaging applications and emails, Trovias created a business model in which he sold—for profit—proprietary information from other companies, stock trading tips, pre-release earnings, and other inside information, as we allege,” FBI Assistant Director William F. Sweeney Jr. said in Friday’s news release. “The FBI operates within the Dark Web too, and as Trovias learned today, we don’t stop enforcing the law just because you commit federal crimes from behind a router with your keyboard.”
According to both the Justice Department and the US Securities and Exchange Commission—which also charged Trovias in a civil complaint on Friday—the Greek national misappropriated earnings reports from various companies, along with other company communications, before they were publicly released.
During the seven months Trovias was on AlphaBay, he allegedly completed at least 45 transactions, including the sale of “dozens” of individual tips and around a half-dozen weekly and monthly plans. Prices allegedly ranged from about $29.95 per tip to $329.95 for a monthly subscription. He also stands accused of selling at least one pre-release earnings report from a publicly traded company for about $5,000.
Once AlphaBay shut down, Trovias allegedly moved to another crime forum called Dream Market. Prosecutors said that from 2017 to last year, Trovias also used encrypted messaging and email services to sell insider information directly to purchasers. Last year, he allegedly took steps to create a website to facilitate insider tip sales. He planned to charge membership fees and commissions from individuals, prosecutors said. SEC attorneys also alleged he used a different dark web site called Nightmare Market.
“During his chats with the FBI agents, Trovias suggested that he would recruit insiders to auction material, nonpublic information on the site, acting as an escrow agent for the sellers and purchasers,” the SEC attorneys wrote. “In August 2020, Trovias suggested an in-person meeting with the two undercover FBI agents to further discuss establishing the Tor website.”
According to a criminal complaint filed in February, stocks Trovias is accused of selling insider information about include MobileIron, Inc., PTC Therapeutics, Inc., Illumina, Inc., and Analogic Corporation. None of those companies are accused of wrongdoing.
Investigators identified Trovias by allegedly sending him payments and using blockchain analysis to monitor the digital wallets that received them. Prosecutors claimed one of the wallets was linked to a payment card Trovias used.
The defendant was charged with one count of securities fraud and one count of money laundering. The securities fraud count carries a maximum penalty of 25 years in prison, and the money laundering count carries a maximum penalty of 20 years in prison. Attempts to reach Trovias for comment weren’t immediately successful.
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