Menu
Nine charged in press release breaches, stock trading scheme

Nine charged in press release breaches, stock trading scheme

The defendants allegedly hacked into the networks of three press release sites and traded on nonpublic information

Nine people face wire fraud, security fraud and other charges on Aug. 11,2015, for a scheme in which they allegedly hacked into the networks of three press release websites and then traded on nonpublic information.

Nine people face wire fraud, security fraud and other charges on Aug. 11,2015, for a scheme in which they allegedly hacked into the networks of three press release websites and then traded on nonpublic information.

Nine people face criminal charges in the U.S. for allegedly hacking three press release distributors and stealing yet-to-be-published announcements in a stock trading scheme that authorities say generated about US$30 million in illegal profits.

Indictments unsealed Tuesday in the district courts for New Jersey and Eastern New York accused the defendants of stealing approximately 150,000 confidential press releases from the servers of Marketwired, PR Newswire Association and Business Wire. The defendants allegedly used the information from more than 800 stolen press releases to conduct stock trades, according to the U.S. Department of Justice.

DOJ officials believe this is the largest newswire hacking scheme ever prosecuted, the agency said. The press releases stolen were from companies traded on Nasdaq and the New York Stock Exchange, the DOJ said.

The defendants were a "well-organized group that allegedly robbed the newswire companies and their clients and cheated the securities markets and the investing public by engaging in an unprecedented hacking and trading scheme," U.S. Attorney Paul Fishman of District of New Jersey said in a statement. "The defendants launched a series of sophisticated and relentless cyber attacks" against the companies.

Five defendants, three from Ukraine and two from the U.S. state of Georgia, face charges of wire fraud conspiracy, securities fraud conspiracy, wire fraud, securities fraud, and money laundering conspiracy. Two of the five also face charges of computer fraud conspiracy, computer fraud, and aggravated identity theft.

In New York, four defendants from Pennsylvania, New York and Georgia face charges of wire fraud conspiracy, securities fraud conspiracy, securities fraud, and money laundering conspiracy.

Early Tuesday, law enforcement agencies seized 17 bank and brokerage accounts containing more than $6.5 million of alleged criminal proceeds. The government also took steps to seize 12 properties, including a shopping center in Pennsylvania, an apartment building in Georgia and a houseboat.

Five of the nine defendants were arrested in the U.S. this morning, and four remain in Ukraine. The DOJ issued international arrest warrants for those four defendants.

Two of the defendants, both computer hackers based in Ukraine, used a series of sophisticated cyberattacks to gain access to the networks of the three press release distribution services between February 2010 and this August, according to the indictments. They stole soon-to-be-released press releases by public companies concerning earnings, revenue and other financial information, the DOJ said.

At one point, one of the hackers sent an online chat message in Russian to another person saying, "I'm hacking prnewswire.com." In another online chat, one of the hackers told the other that he had compromised the log-in credentials of 15 Business Wire employees.

The hackers shared the stolen press releases with the seven others charged in the indictments so they could initiate stock trades, the DOJ said. The two hackers shared instructions in a series of emails on how to access an overseas server where they shared the stolen releases.

The traders created wish lists for the hackers of their desired upcoming press releases from Marketwired and PR Newswire. Many of the trades made by the defendants occurred on the same day, but before the press releases were made public, resulting in a "flurry" of trading activity around a stolen press release, the DOJ said.

Among the companies targeted in the scheme: Caterpillar, Hewlett Packard, Home Depot, and Verisign.

The wire fraud conspiracy and wire fraud counts carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.  The securities fraud conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss.

The securities fraud counts carry a maximum potential penalty of 20 years in prison and a $5 million fine, or twice the gain or loss. The money laundering conspiracy count carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the funds involved in the illegal transfers.

The computer fraud counts carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss.  The aggravated identity theft counts carry a mandatory prison term of two years.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags U.S. Department of JusticePR Newswire AssociationPaul Fishmansecuritydata breachlegalMarketwiredBusiness Wirecybercrime

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments