Federal prosecutors and attorneys charged a man Friday with securities fraud for allegedly selling insider stock information on the dark website AlphaBay. The defendant also sold information through multiple 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 alleged that Apostolos Trovias, 30, of Athens, Greece, created an account on AlphaBay in 2016 and used it until dark to to advertise and sell stock tips. web crime marketplace closed the following year. Prosecutors said Trovias under the pseudonym “The Bull” 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 insider information, as we claim. said FBI Assistant Director William F. Sweeney Jr. in Friday’s press release. “The FBI also operates within the Dark Web, 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 U.S. Securities and Exchange Commission — which Trovias also sued in a civil complaint Friday — the Greek national has misappropriated earnings reports from several companies, along with other corporate communications, before being released publicly.
During the seven months that Trovias was on AlphaBay, he reportedly completed at least 45 trades, including the sale of “dozens” of individual tips and about half a dozen weekly and monthly subscriptions. Prices reportedly ranged from about $29.95 per tip to $329.95 for a monthly subscription. He is also charged with selling at least one pre-release earnings report from a publicly traded company for about $5,000.
After AlphaBay closed, Trovias is said to have 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 inside information directly to buyers. Last year, he is said to have taken steps to create a website to facilitate the sale of insider tips. He planned to charge membership fees and commissions from individuals, prosecutors said. SEC attorneys also claimed he used another dark website called Nightmare Market.
“During his chats with the FBI agents, Trovias suggested that he recruit insiders to auction material, nonpublic information on the site, as an escrow agent for the sellers and buyers,” the SEC attorneys wrote. “In August 2020, Trovias suggested a face-to-face meeting with the two undercover FBI agents to further discuss the creation of the Tor website.”
According to a criminal complaint filed in February, Trovias is accused of selling insider information about, among others, MobileIron, Inc., PTC Therapeutics, Inc., Illumina, Inc. and Analogic Corporation. None of those companies are accused of misconduct.
Researchers identified Trovias by allegedly sending him payments and using blockchain analytics to monitor the digital wallets they received. Prosecutors alleged that one of the wallets was linked to a payment card used by Trovias.
The defendant was charged with one count of securities fraud and one count of money laundering. The count of securities fraud carries a maximum prison sentence of 25 years and the count of money laundering carries a maximum prison term of 20 years. Attempts to reach Trovias for comment were not immediately successful.