Hackers, predominantly based in Ukraine and Russia, repeatedly infiltrated the networks of Business Wire, Marketwired and PR Newswire over a period of five years in order to gain profitable information.
Nine of the alleged hackers have now been indicted in the US, charged with stealing more than 100,000 news releases, making more than $30 million. In total, it is believed that 32 hackers have made in excess of $100 million via illegal trading of corporate information.
Federal prosecutors, in conjunction with regulators from the Securities and Exchange Commission have now announced a series of arrests and revealed the names of those being indicted. Vitaly Korchevsky, believed to have made $17 million through the scheme, was arrested on Tuesday alongside four other men.
By acquiring the news releases ahead of schedule, individuals were able to gain an advantage in the stock market. Illegal traders often issued hackers with a “shopping list” of companies that they wished to trade on and paid them either a one-off fee or a percentage of their profits.
The investigating authorities added that the traders were careful to conceal their actions, only trading on approximately 800 of the hundreds of thousands of press releases that they acquired. Overall, information pertaining to more than 30 companies, including the likes of Bank of America and Honeywell, was illegally traded.
However, many of the hackers spoke openly online about their actions using Internet chat rooms and the authorities have been investigating some of the individuals involved for years. In 2012, for example, they seized a laptop belonging to one of the hackers and found 200 non-public news releases from PR Newswire.
Law enforcement officials have already recovered tens of millions of dollars from the offenders’ bank accounts as well as seizing property acquired with the hacking proceeds. Matthew L. Schwartz, a lawyer at Boies, Schiller and Flexner that specialises in digital crime said that the case highlights the importance of online information.
Read more: The insider data hack: A legal perspective
“When we think of hackers who try to profit from their crimes, we usually think about people who steal bank account information or sell sensitive personally identifying information,” he explained. “The reality, as exemplified by today’s charges, is that hackers can obtain access to all sorts of valuable information and can and will profit off of it in every way imaginable.”