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Cybercrime Ring Busted in US
World Economy

Cybercrime Ring Busted in US

Exposing a new front in cybercrime, US 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, according to a person familiar with the matter.

Officials have identified nine participants who operated the scheme and are expected to be charged Tuesday by officials in Brooklyn, New York and New Jersey, Bloomberg reported.

The hackers, who are thought to be in Ukraine and possibly Russia, infiltrated the computer servers of PRNewswire Association LLC, Marketwired and Business Wire, a unit of Warren Buffett’s Berkshire Hathaway Inc., according to a person familiar with the matter.

The hackers passed the information to their associates in the US, 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 their retail brokerage accounts. The scheme netted more than $30 million, said the person.

It is the first major case of insider trading to cross into the cyber realm, exposing the vulnerabilities of financial markets in the digital age. Just as prosecutors deploy ever-more aggressive tactics like wiretaps to curb illegal trading, criminals have now leapt past them with a simple ruse: Steal information instead of persuading others to share it improperly. It’s also a great equalizer. No longstanding Wall Street connections are needed to glean advance information from companies.

 

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