Ar­rest in US in­sider trad­ing case from law firm hacks

Kuwait Times - - BUSINESS -

US pros­e­cu­tors an­nounced crim­i­nal charges Tues­day against three hack­ers who al­legedly made $4 mil­lion in il­licit prof­its from in­sider trad­ing of in­for­ma­tion pil­fered from law firms ad­vis­ing on cor­po­rate merg­ers.

The three de­fen­dants, two from Ma­cau and one from China, suc­cess­fully breached the com­puter net­works of in­ter­na­tional law firms with New York of­fices by un­law­fully ob­tain­ing a firm em­ployee’s cre­den­tials and in­stalling mal­ware on his com­pany’s server, the US At­tor­ney’s of­fice in New York said.

The mal­ware per­mit­ted the hack­ers to mon­i­tor law firm com­mu­ni­ca­tions about more than a dozen trans­ac­tions in 2014 and 2015 that were dis­cussed or con­tem­plated, in­clud­ing some deals that were never con­sum­mated. The hack­ers then bought shares of com­pa­nies that would later be ac­quired, win­ning big prof­its. The hack­ers al­legedly made $380,000 on trades of In­ter­mune, a drug maker bought by Ger­many’s Roche in 2014; $1.4 mil­lion in trades on Al­tera, bought by In­tel in 2015; and $841,000 on Border­free, ac­quired by Pit­ney Bowes in 2015.

“This case of cy­ber-meets-se­cu­ri­ties fraud should serve as a wake-up call for law firms around the world: you are and will be tar­gets of cy­ber hack­ing be­cause you have in­for­ma­tion valu­able to would-be crim­i­nals,” US At­tor­ney Preet Bharara said. The au­thor­i­ties ar­rested Iat Hong of Ma­cau in Hong Kong, who is now pend­ing ex­tra­di­tion pro­ceed­ings. The other two de­fen­dants, Chin Hung of Ma­cau and Bo Zheng of China, are at large, a spokesman for the US At­tor­ney’s of­fice said.

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