Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

First Dark Web Insider Trading Case Shows Government Active In Policing Tech

By Ian McGinley
April 01, 2022

In United States v. Trovias, in a first of its kind prosecution, the Southern District of New York (SDNY) brought an insider trading case against Apostolos Trovias for selling inside information on the Dark Web. Unsurprisingly, the Securities and Exchange Commission (SEC) also brought a civil regulatory action against Trovias for the same conduct. In a rare move, however, SDNY and SEC charged this same conduct under different insider trading statutes. This difference underscores the legal complexities involved when the origin of inside information in the digital world is unknown. It also highlights the desire of both agencies to be aggressive in applying insider trading laws to crimes involving modern technologies. Ultimately, these cases show that the government will be active in policing the use of technology for insider trading, including through messaging apps and social media.

|

The Allegations Against Trovias

According to SDNY's indictment, Trovias, who went by the alias "The Bull," used websites on the Dark Web and encrypted messaging services to sell inside business information about publicly traded companies that Trovias had misappropriated. The Dark Web refers to websites on the Internet that cannot be accessed through traditional search engines. To access the Dark Web, one simply downloads an anonymizing web browser.

The Indictment alleges, among other things, that Trovias sold tips based on inside information about public companies that could be purchased for a fee, often paid in Bitcoin. Trovias is also alleged to have sold inside information directly to purchasers using encrypted messaging and email services. The Indictment does not identify where or how Trovias obtained the alleged inside information.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Landlord & Tenant Law Image

Commercial Tenant Not In Default

Co-ops and Condominiums Image

Count Invokes Business Judgment Rule to Uphold Fines Imposed By Co-Op Board

Real Property Law Image

Questions of Fact About Compliance With Mortgage Contingency ClauseMortgagee Who Purchased At Foreclosure Sale Failed to Establish Bona Fide Purchaser StatusSupreme Court Was Premature In Holding That Option Violated Rule Against Perpetuities

Development Image

Developer’s Taking Claims Survive Motion to DismissDEC Incorrectly Granted Permit to Expand Nonconforming Mining UseMemorandum of Understanding Not Binding on Subsequent Town Board

City of Yes: Housing Opportunity — A Little Bit Of Everything, Everywhere Image

New York City’s recently adopted City of Yes for Housing Opportunity (CHO) represents the most significant overhaul of residential zoning regulations in decades. The interplay between existing procedures and new provisions will likely generate significant interpretive questions and litigation as developers seek to take advantage of these opportunities.