Hackers help stock traders earn 'up to $100m' in illegal profits
Group of nine charged with insider trading based on hacked information found in unreleased press statements
US investigators announced yesterday that charges had been brought against nine stock traders and hackers who allegedly made as much as $100m from using stolen information to trade.
The US-based traders reportedly paid Ukrainian hackers to access corporate press statements before they were published. The traders apparently paid the hackers a portion of the profits that resulted from the insider trading.
Up to 150,000 press releases from leading newswires were thought to have been accessed before they were published, prosecutors said. The information related to firms including Caterpillar Inc., Hewlett-Packard Co., and Home Depot Inc., among others, Reuters reported.
US investigators said that this was a classic securities fraud case with a modern twist.
"This is the story of a traditional securities fraud scheme with a twist - one that employed a contemporary approach to a conventional crime," said Diego Rodriguez, FBI assistant director-in-charge.
The hackers were reportedly given ‘shopping lists' of companies that the traders wanted inside information on. After the information had been secured, the hackers created video tutorials that would help the traders access the files.
Reuters said that five of the gang were arrested yesterday, while international arrest warrants were issued for the others.
The US authorities said that this incident was the latest evidence that hackers are becoming more advanced, and urged companies with sensitive information to take the necessary precautions to protect themselves.
"This case illustrates how cyber criminals and those who commit securities fraud are evolving and becoming more sophisticated," said Paul Fishman, a US Attorney in New Jersey.
"The hackers were relentless and they were patient."