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Nine people were charged on Tuesday with various offences relating to the hacking of newswire services in order to gain access to unpublished press releases. The accused stole companies' financial information in order to make stock trades based on the data which netted them $100 million in ill-gotten gains.
Five of the nine men named in the indictments were arrested in a series of raids in the states of Georgia and Pennsylvania. The four others are in the Ukraine and face international arrest warrants. One of the men, Vitaly Korchevsky, a hedge fund manager and former Morgan Stanley employee from Philadelphia, made $17 million in illegal profits, the indictment 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 J. Fishman said. “The defendants launched a series of sophisticated and relentless cyber attacks against three major newswire companies, stole highly confidential information and used to enrich themselves at the expense of public companies and their shareholders.”
According to a US Justice Department announcement, three major press release distributors, Marketwired, PR Newswire and Business Wire, were targeted in the scam by Ukrainian hackers between February 2010 and August 2015. The cybercriminals then took orders from traders to pilfer press releases regarding specific companies ahead of their embargo times. In all, the Securities and Exchange Commission (SEC) has charged a total of 32 hackers and traders involved in the scheme.
At least six government agencies—the Federal Bureau of Investigation, the Securities and Exchange Commission, the Secret Service, the Department of Homeland Security and the U.S. attorney’s offices in Brooklyn and New Jersey—will bring the charges against the group, according to the Wall Street Journal.
The nine defendants face a series of charges which, if they are found guilty, could see them sentenced to more than 20 years imprisonment and faced with multi-million dollar fines.