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Nine men have been charged with crimes related to a $30 million insider trading scheme that exploited knowledge obtained from hacked press releases:
In morning raids in Georgia and Pennsylvania, federal agents arrested five men in the plot, while four others indicted on hacking and securities fraud charges remain at large. The hackers, who are thought to be in Ukraine and possibly Russia, allegedly infiltrated the computer servers of PRNewswire Association LLC, Marketwired and Business Wire, a unit of Warren Buffett's Berkshire Hathaway Inc., over a five-year period. They siphoned more than 100,000 press releases including corporate data on earnings that could be used to anticipate stock market moves and make profitable trades. The hackers passed the information to associates in the U.S., who allegedly used it to buy and sell shares of dozens of companies, including Panera Bread Co., Boeing Co., Hewlett-Packard Co., Caterpillar Inc. and Oracle Corp., through retail brokerage accounts.
Prosecutors said the men targeted more than 100 companies and made "approximately 1,000 inside the window trades." Money was then shifted offshore through Estonian banks, according to one of two federal indictments unsealed Tuesday. While U.S. prosecutors said the nine men netted $30 million, a broader lawsuit by the Securities and Exchange Commission listed 12 men and 15 companies as defendants in a scheme that allegedly earned more than $100 million. By way of comparison, Manhattan U.S. Attorney Preet Bharara described the $275 million insider trading case of SAC Capital Advisors LP portfolio manager Mathew Martoma as the biggest ever against a single person.
From Reuters:
"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 in a statement. Prosecutors said that hackers based in Ukraine infiltrated press releases before they were due to be released by the distributors. They included those that traders had put on "shopping lists" of releases that they wanted, prosecutors said. The hackers created a "video tutorial" to help traders view the stolen releases, and were paid a portion of the profits from trades based on information contained there, prosecutors said.
New Jersey indictment [PDF], NPR.
(Score: 3, Funny) by skullz on Wednesday August 12 2015, @03:14PM
The best part is when they had to make a video tutorial to show the A-Team Alpha Wall Street Traders how to access an FTP server.
Those Ukrainian hackers, man! Full service.