http://www.sec.gov/news/speech/press-conference-remarks-massive-hacking-trading-scheme.html "Two Ukrainian hackers are charged with spearheading the scheme, Ivan Turchynov and Okelsandr Ieremenko. Along with the 30 other defendants, they are collectively alleged to have made more than $100 million in illegal profits by trading based on pre-release corporate earnings announcements stolen from multiple newswire services. We charged these defendants in a complaint unsealed today with multiple securities fraud violations, seeking disgorgement and penalties, and we obtained an asset freeze against the overseas traders, which secured at least $20 million of the defendants’ ill-gotten gains. And the SEC’s investigation continues. The complaint charges that Turchynov and Ieremenko used malicious programming code and other deceptive techniques to hack into the computer systems of multiple newswire services that stored unpublished corporate earnings announcements. These announcements were slated for public release at a prescheduled date and time, and the hackers took advantage of the time gap. According to the complaint, the two primary hackers brazenly recruited traders with a video showcasing the hackers’ ability to steal and transmit earnings information before its public release."
This is really ridiculous. An underdeveloped country like Ukraine is playing with the entire US computer science industry and makes the Americans look ridiculous. Corporate earnings announcements should be kept secret in the company, and should never be sent in advance to all kind of media. The company will make the announcement and risk for leaks are very limited. I never understood why this sensitive information should be spread, maybe to let others (Americans, not Ukrainians) take advantage of it. Maybe a hidden agenda? I see no other credible explanation.
Yeah, the "time gap" between receipt of the reports by the media and the release to the public will always be a weak link in preventing leaks and hacks.
Specific of the scheme have been unsealed and are posted here: http://www.sec.gov/litigation/complaints/2015/comp-pr2015-163.pdf
They should block all trading before they send the news to newswire, and open it again after publication. Problem solved.
Just a tiny tip of the iceberg. media and banks are much bigger fish. they should be banned to know earnings, etc things ahead.
More on this from Bloomberg today. These guys were brazen. http://www.bloomberg.com/news/artic...lion-insider-trading-shop-sold-data-on-demand "The seemingly magical system, these people wrote, made money throughout 2012. The typical trader could expect to make as much as $50,000 a month, the e-mails said. At one point, a would-be customer told one of the hackers that something must be wrong with his business model because he was selling information too cheaply. The hacker replied that the customer had to take whatever was offered -- for now. The traders developed a “wish list” of press releases for hackers to steal, and then quickly bought and sold shares based on what they learned, according to the indictment. The hackers used middlemen to communicate with traders, according to the indictment. As their business thrived, they sought to expand the operation by sharing tips on other fraud schemes and recruiting new traders and hackers through Internet chats and e-mails."
In these times of tight budgetary restrictions on various US departments, it seems like a good move to catch as many hackers, fraudsters, scammers, crooks, and criminals of whatever description : here by going after the hackers, the hackers'customers, who knows if the SEC can collect more than 200/500 million$. Thus replenishing US departments. With more hires, then they can expand into other Law Enforcement activities, and make more money. Now, if they were to systematically offer 10% to whistleblowers and full anonymity , I am sure they'd collect even more.