Federal prosecutors and lawyers on Friday accused a man of securities fraud of allegedly selling insider share information on the dark site AlphaBay. The defendant also sold information through several criminal marketplaces and through an encrypted messaging platform.
In a lawsuit filed in federal court in the southern district of New York, Justice Department prosecutors claimed that Apostolos Trovias, 30, in Athens, Greece, set up an account on AlphaBay in 201
Behind the dark web veil
“Behind the veil on the dark web, using encrypted messaging applications and emails, Trovias created a business model in which he – for profit – sold proprietary information from other companies, stock trading advice, pre – release earnings and other inside information, as we claim, ”said FBI Assistant Director William F. Sweeney Jr. in Friday’s press release. “The FBI also operates on the dark web, and as Trovias learned today, we do not stop enforcing the law just because you commit federal crimes behind a router with your keyboard.”
According to both the Department of Justice and the U.S. Securities and Exchange Commission – which also accused Trovias in a civil lawsuit on Friday – Greek nationals have abused earnings reports from various companies along with other corporate communications before they were made public.
During the seven months Trovias was on AlphaBay, he reportedly revealed at least 45 transactions, including the sale of “dozens” of individual tips and about half a dozen weekly and monthly plans. Prices reportedly ranged from around $ 29.95 per person. Tip for $ 329.95 for a monthly subscription. He is also accused of selling at least one pre-release earnings report from a listed company for about $ 5,000.
When AlphaBay shut down, Trovias reportedly 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 buyers. Last year, he reportedly took steps to set up a website to facilitate the sale of insider tips. He planned to charge membership fees and commissions from individuals, prosecutors said. SEC lawyers also claimed he was using another dark site called Nightmare Market.
“During his chats with FBI agents, Trovias suggested he would recruit insiders for auction of material, non-public information on the site that acted as a deposit agent for sellers and buyers,” SEC attorneys wrote. “In August 2020, Trovias proposed a personal meeting with the two undercover FBI agents to further discuss the creation of the Tor website.”
According to a criminal lawsuit filed in February, shares of Trovias are accused of having sold insider information about, among others, MobileIron, Inc., PTC Therapeutics, Inc., Illumina, Inc. and Analogic Corporation. None of these companies are accused of injustice.
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 debit card used by Trovias.
The defendant was charged with a count of securities fraud and a count of money laundering. The value of securities fraud carries a maximum penalty of 25 years imprisonment and the amount of money laundering carries a maximum penalty of 20 years imprisonment. Attempts to reach Trovias for comment did not succeed immediately.