US indicts dark web user 'The Bull' for insider trading

The U.S. Department of Justice (DoJ) has charged an individual for engaging in insider trading on the darknet.

Greece-based Apostolos Trovias, known as the "The Bull" frequently used encrypted messaging services and the dark web for soliciting, exchanging and selling inside information.

Taking 'The Bull' by his horns

This month, U.S. DoJ indicted Apostolos Trovias aka "The Bull" for insider trading via the darknet, since at least 2016.

The 30-year old, Athens-based Trovias allegedly used dark web and encrypted messaging apps for years to engage in securities fraud and money laundering activities.

The alleged fraud scheme was used to solicit and sell stock trading tips, pre-release earnings, and deal information related to public companies.

The scheme comprised related efforts to help procure and monetize confidential non-public information, including:

1. the sale of misappropriated stock tips based on confidential customer trading information,
2. the sale of pre-release earnings reports and deal information misappropriated from publicly-traded companies,
3. the attempted creation of an online marketplace to connect, for a commission, individuals misappropriating Inside Information to individuals willing to pay for and trade on Inside Information.

According to a Federal Bureau of Investigation (FBI) assistant director, Trovias had created an illicit, profitable business where he traded proprietary information on companies, but (un)fortunately got caught: 

"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."

"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," said FBI Assistant Director William F. Sweeney Jr. in a DOJ press release.

In the same release, law enforcement authorities shared examples of some of "The Bull's" activities.

For example, DOJ states, in mid-2017, Trovias had put up for sale, and successfully sold stock tips based on proprietary inside information on certain security issuers.

These kinds of illegal sets of information were sold as part of "weekly or monthly subscriptions," or individually. 

Further, to facilitate sales activities, Trovias used end-to-end encrypted messaging apps and email services to communicate with prospective and current clients.

"For instance, TROVIAS offered for sale and did sell, among other confidential information belonging to various securities issuers, for approximately $5,000 in Bitcoin, at least one pre-release earnings report misappropriated from a publicly-traded company," reads the release. 

Allegations yet to be proven in court

United States Attorney for the Southern District of New York, Audrey Strauss stressed that committing insider trading even using newer technologies still produces a decidedly traditional outcome— a criminal indictment.

"Today’s charges demonstrate our Office's continuing commitment to stopping those who pursue and use inside information to gain an illegal edge in the stock market."

"As alleged, Apostolos Trovias attempted to hide his insider trading scheme behind anonymizing software, screennames, and bitcoin payments," said Strauss.

Trovias has been charged with one count of securities fraud, carrying a maximum penalty of 25 years in prison, and one count of money laundering that carries a maximum penalty of 20 years in prison.

But, without the court's verdict, this indictment and complaint are "merely accusations," and unless and until proven guilty, the defendant is presumed innocent.

The Securities and Commodities Fraud Task Force is overseeing the prosecution of this case which is led by Assistant U.S. Attorneys Matthew Podolsky and Andrew Thomas.