US authorities have busted an international criminal syndicate that broke into the computer networks of press release distribution companies to access non-public information and use it for stock trading.
At least five traders in the United States were arrested early Tuesday in connection with the scheme, which went on five years and netted as much as US$100 million, Bloomberg News and CBS News reported.
“This international scheme is unprecedented in terms of the scope of the hacking, the number of traders, the number of securities traded and profits generated,” said Securities and Exchange Commission chair Mary Jo White in a statement.
Bloomberg described the scheme as a combination of digital-age cybercrime and old-fashioned insider trading.
Working from Ukraine, the hackers infiltrated several widely used US newswire systems — PRNewswire, BusinessWire and Marketwired — and stole from more than 100,000 press releases before the news was made public. The releases were mostly about corporate earnings.
They then sold that market-sensitive information to a league of traders on both sides of the Atlantic, the report said.
SEC has sued 17 individuals in a civil complaint, while prosecutors brought criminal charges against nine of them.
The hackers and some defendants remain at large.
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