US authorities have charged nine people with hacking into business newswires to steal yet-to-be published press releases containing financial information that was used to make trades netting around $30 million in illegal profits.
Of the nine charged in indictments unsealed in Brooklyn, New York and Newark, five have been arrested on charges including wire fraud, securities fraud and money laundering conspiracy. The other four are in Ukraine and face international arrest warrants.
The Securities and Exchange Commission has laid its own charges against 32 people, alleging that the illegal profits were actually more than $100 million.
According to the indictments, as far back as February 2010 two of the men, Ivan Turchynov and Oleksandr Ieremenko, hacked into the computer networks of Marketwired, PR Newswire Association, and Business Wire.
Over the years, the hackers then stole around 150,000 press releases, focusing on upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material financial information.
At one point, one of the hackers sent an online chat message in Russian to another individual stating, "I’m hacking prnewswire.com". In another online chat, Ieremenko told Turchynov that he had compromised the log-in credentials of 15 Business Wire employees.
The information was then shared with traders, who traded ahead of more than 800 stolen releases, enabling them to pull in around $30 million in illegal profits, say authorities.
The traders paid the hackers for access to overseas servers containing the press releases, in part, on a percentage of the money made from trading. Foreign shell companies were used to share in the profits.
If found guilty, the nine could all face lengthy prison terms and heft fines.