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Nine People Charged in Insider Trading Related Case
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Summary: Criminal charges were brought against four Brooklyn traders and five hackers in Ukraine for stealing not yet released information which traders used to profit off.

A group of hackers in Ukraine and U.S. based stock traders are believed to have made upwards of $100 million off of insider trading over the course of five years. The hackers stole press releases that had not been released yet and gave the information to the traders in return for a percentage of the profits.

  
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These charges are the first time that U.S. prosecutors have given criminal charges for securities fraud involving hacked information. The hackers in the case stole 150,000 press releases from Business Wire, PR Newswire, and MarketWired.

Traders made a “shopping list” of the releases they were interested in and then the hackers took the press releases from the three distributors before they were released to the public. The hackers in Ukraine then put together a “how to” video, explaining how the traders could view the press releases. They made a portion of the profit from any trades that were made based on the information obtained.

The nine indicted were from Brooklyn, New York and Newark, New Jersey. The U.S. Securities and Exchange Commission (SEC) filed a separate lawsuit charging more people that were involved in what they allege was closer to $100 million in illegal profits. The grand jury case is only accusing them of $30 million in profits.

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U.S. attorney for New Jersey Paul Fishman stated “this case illustrates how cyber criminals and those who commit securities fraud are evolving and becoming more sophisticated.” The distributors were not charged with anything and were very cooperative in the investigation. The companies profited off were Acme Packet Inc, Align Technology Inc, Caterpillar Inc, Dealertrack Technologies Inc, Dendreon Corp, Edwards Lifesciences Corp, and Panera Bread Co.

Source: http://www.reuters.com/article/2015/08/11/us-cybercybersecurity-hacking-stocks-arr-idUSKCN0QG1EY20150811



Photo: nz.news.yahoo.com



 

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