Malta regulated prime broker, EXANTE, is allegedly involved in one of the largest financial cybercrime networks of all times. Dozens of traders from around the world, who seem to be linked to a hub in Ukraine, illegally traded on insider information stolen by hackers from newswires.
The US Securities and Exchange Commission (SEC) filed fraud charges against over thirty people yesterday for being involved in the crime ring, and relayed that they were generating more than $100 million in illegal profits.
According to the charges, Exante Ltd. holds proprietary trading accounts at Interactive Brokers and at Lek Securities, which were used in connection with the scheme to make trades resulting in approximately $24.5 million in ill-gotten gains.
Exante is owned by Lartemisis Holdings Ltd which shares the same address as Portomaso Tower in St Julian’s, Malta. Its founder and CEO is Alexey Kirienko, who founded a public Global Hedge Capital Fund in 2007. According to his past description, the hedge fund contributed key technological infrastructure and knowledge base for the prime brokerage company, EXANTE Ltd.
In its complaint, the SEC said that several of Exante’s directors are also owners of defendant Global Hedge Capital Fund Ltd., and the two entities share employees. “Exante and Global Hedge frequently made illicit trades in the same securities, on the same days and around the same time, and often through the same IP addresses,” the charges read.
According to local reports in Malta, three of the company’s five directors have Maltese addresses; Bruno Cakans, Gatis Eglitis and Alexey Kirienko. The two other directors; Anatoli Knyazev and Vladimir Masliakov live in Moscow, Russia.
Exante denied the allegations, saying,“The complaint completely misrepresents Exante, our business model, and the regulatory conditions we operate in. Exante has worked hard to build a strong brand respected by its peers that serves as a one-stop shop for all markets and instruments. The company was built for traders by traders and any illicit trading will not be tolerated.”
“Contrary to claims in the complaint as well as in the media, Exante has never been and is not a hedge fund. Our business model is to execute trades for our clients.”
The company added that it is in “direct contact with multiple authorities, including the MFSA, to resolve this issue swiftly. We have no doubt in time we will be proven to have acted in an appropriate manner and await the factual results.
“Our employees will continue to work hard to ensure Exante clients continue to receive outstanding service whilst gaining peace of mind and security.”