A group of mainly U.S.-based stock traders and computer hackers in Ukraine made as much as $100 million in illegal profits over five years by conspiring to use information stolen from thousands of corporate press statements before their public release, say U.S. authorities, reports Reuters. Prosecutors yesterday announced charges against nine people in an insider-trading case that marks the first time criminal charges have been brought for a securities fraud scheme involving hacked inside information, in this instance 150,000 press releases from distributors Business Wire, Marketwired and PR Newswire. “This is the story of a traditional securities fraud scheme with a twist, one that employed a contemporary approach to a conventional crime,” said the FBI’s Diego Rodriguez.
Prosecutors said the Ukraine-based hackers, who were given “shopping lists” of press releases by traders, improperly accessed press statements before the distributors released them to the public. The hackers created a “video tutorial” to help traders see the stolen releases and were paid a portion of the profits from trades based on the information in them, prosecutors said. The nine people were indicted by grand juries in Brooklyn and Newark on charges that they made $30 million in illegal profits starting around February 2010. The U.S. Securities and Exchange Commission in a civil lawsuit charged 17 people and 15 corporate entities, and said that thefts of inside information resulted in more than $100 million in illegal profit.