(Adds details on court hearing)
By Nate Raymond
NEW YORK, Dec 21 (Reuters) - A Georgia-based real estatedeveloper pleaded guilty on Monday to participating in what U.S.authorities say was a $100 million insider trading scheme thatinvolved hacking into networks that distribute corporate newsreleases.
Alexander Garkusha, who authorities say traded on insideinformation, pleaded guilty in federal court in Brooklyn, NewYork, to conspiracy to commit wire fraud, becoming the firstdefendant criminally charged in the case to admit wrongdoing.
Garkusha, who also agreed to cooperate with authorities,admitted that over a three-month period he used corporate pressreleases obtained before they were released publicly to make$125,000 trading in stocks.
"I am very sorry I did this," Garkusha said in court. "Iknow that it was against the law."
Garkusha, a resident of Alpharetta and Cumming, Georgia,near Atlanta, was arrested in August along with four otherindividuals in what authorities said was the first criminal caseover a securities fraud scheme involving hacked insideinformation.
Prosecutors said Garkusha, 47, who was born in Russia and isa U.S. citizen, was among a group of traders who executedsecurities transactions based on inside information stolen byhackers in Ukraine.
Nine people were subsequently indicted and 34 defendantswere named in a lawsuit by U.S. securities regulators forengaging in a scheme to steal over 150,000 press releases fromBusiness Wire, Marketwired and PR Newswire before the newsbecame public.
Business Wire is a unit of Warren Buffett's BerkshireHathaway Inc. Britain's UBM Plc last weekannounced it would sell PR Newswire to Cision for $841 million.
The U.S. Securities and Exchange Commission said thelong-running scheme enabled the defendants to make over $100million. The more narrowly focused criminal case againstGarkusha alleged that he and his co-defendants earned $30million.
Garkusha had been an executive vice president at Alpharetta,Georgia-based APD Developers Inc, which designed and builtresidential communities and condominiums.
As part of his plea, Garkusha agreed to forfeit his $125,000in profits. His sentencing is scheduled for May 6.
Charges remain pending against four other defendants arrested in August on indictments filed in Brooklyn and Newark,New Jersey: Arkadiy Dubovoy, Igor Dubovoy, Leonid Momotok andVitaly Korchevsky.
Those four have pleaded not guilty. The Dubovoys arescheduled to face trial on Oct. 3.
The case is U.S. v. Korchevsky et al, U.S. District Court,Eastern District of New York, No. 00381. (Reporting by Nate Raymond; Editing by Dan Grebler and JamesDalgleish)