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.

Join the PC World newsletter!

Error: Please check your email address.

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

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?