Russian Businessman Sentenced to Nine Years in Prison for $100 Million Stock Market Cheating Scheme

Russian businessman Vladislav Klyushin has been sentenced to nine years in prison for his involvement in a nearly $100 million stock market cheating scheme. Klyushin, who has ties to the Kremlin and ran a Moscow-based information technology company, was convicted of wire fraud and securities fraud in February. The scheme relied on stolen insider information obtained by hacking U.S. computer networks.

Klyushin profited over $33 million from the scheme, which involved stealing earnings-related filings for hundreds of companies, including Microsoft and Tesla, and using that insider information to make lucrative trades. He has been detained in the U.S. since his extradition in 2021 and will receive credit for over two years he has served.

Four alleged co-conspirators, including a Russian military intelligence officer, remain at large and are unlikely to be extradited to the U.S. Prosecutors had sought a 14-year prison sentence, emphasizing the need to send a strong message to overseas cyber criminals. Klyushin’s defense argued for leniency, stating that he had no prior criminal history and had already faced significant punishment.

The scheme involved hackers stealing employees’ usernames and passwords for two U.S.-based vendors used by publicly traded companies to make filings through the Securities and Exchange Commission. By obtaining insider information, the hackers manipulated the stock market by buying shares of companies about to release positive financial results and selling shares of companies about to post poor financial results.

Klyushin’s information technology company had high-profile clients, including the administration of Russian President Vladimir Putin and the Ministry of Defense. One of his close friends and alleged co-conspirators, a military officer named Ermakov, remains at large. Prosecutors have not alleged Klyushin’s involvement in election interference.

After completing his prison term, Klyushin is expected to be deported to Russia.