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.
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