Involved hacking into press releases of companies.
By Raif Karerat
WASHINGTON, DC: U.S. authorities broke up an alleged insider trading ring that relied on computer hackers to pilfer corporate press announcements and then profited by trading on the sensitive information before it became public.
U.S.-based stock traders and computer hackers in Ukraine enabled a criminal network to make as much as $100 million in illegal profits over five years after stealing confidential corporate press releases, U.S. authorities released on Tuesday.
“This is the story of a traditional securities fraud scheme with a twist – one that employed a contemporary approach to a conventional crime,” FBI Assistant Director-in-Charge Diego Rodriguez said at a news conference.
The U.S. Securities and Exchange Commission has brought civil charges against nine people New Jersey and New York City. The lawsuit names 17 individuals living in the U.S., Russia and Ukraine, and 15 companies in the U.S., Russia, France, Cyprus and Malta that profited from the scheme, reported the Associated Press.
The suspected hackers allegedly infiltrated the computer servers of PRNewswire Association LLC, Marketwired, and Business Wire, a unit of Warren Buffett’s Berkshire Hathaway Inc., according to Bloomberg, and siphoned more than 150,000 press releases including corporate data on earnings that could be used to anticipate stock market moves and make profitable trades.
The hackers created a “video tutorial” to help traders see the stolen releases, and were paid a portion of the profits from trades based on the information in them, prosecutors said, according to Reuters.
“This case illustrates how cyber criminals and those who commit securities fraud are evolving and becoming more sophisticated,” Paul Fishman, the U.S. attorney for New Jersey, said at the news conference.