U.S. Prosecutors Charge Three Chinese Hackers With Insider Trading
Three Chinese men were charged by federal prosecutors with hacking the networks of major merger and acquisition firms for information, which they used to make profitable stock trades.U.S. federal prosecutors charged three Chinese nationals with hacking the networks of U.S.-based international law firms and using information from those firms to conduct insider trading, making more than $4 million from the scheme, according to a statement by the U.S. Attorney’s Office. The three men targeted at least seven firms which advised companies involved in acquiring, or being acquired by, other companies, according to a statement released by Preet Bharara, the U.S. Attorney for the Southern District of New York. After successfully compromising two law firms, the group then allegedly bought shares in companies that were about to be acquired or which planned to acquire the other firms. They then sold the shares after the M&A deals were announced. “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,” he said in the statement.
The FBI and the U.S. Attorney’s office worked with the Securities and Exchange Commission, the Office of International Affairs and Hong Kong law enforcement to investigate the group. One of the accused, Iat Hong, a resident of Macau, was arrested by local authorities on Dec. 25 and is awaiting extradition proceedings.