Federal Court Charges Three Chinese Hackers In Insider Trading Fiasco
The Manhattan Federal Court has charged three Chinese nationals for allegedly hacking into the servers of two prominent law firms in the US. According to the charges, the trio stole confidential emails from the law firm’s servers and used the confidential information of potential acquisitions and active mergers to conduct insider trading. The court believes that the traders made $4 million in trades, with the help of this information. Two of the hackers, Ian Hong and Chin Hung, are based in Macau, Hong Kong, while the third, Bo Zheng, is said to be from Changsha. Currently, only Mr. Hong has been arrested, while the others remain at large.
In addition to this, a parallel action has been filed by the Securities Exchange Commission, in civil court. The SEC lawsuit identifies the three hackers as employees of an IT firm. Furthermore, the SEC lawsuit also revealed that the hacked information was from April 2014 to late 2015. Moreover, the trio has also been charged with attempting to hack five other law firms, with the same intentions. The news comes at a time when law enforcement officials have been asking law firms to step up their cyber security, as more insider trading cases are expected to come to light.
Preet Bharara, the US attorney in Manhattan, stated that the current case should be a wake-up call for others, not only in the US, but around the world. She claimed that lawyers these days have access to sensitive information, which is valuable to would-be-criminals and that makes law firms a prime target. Although the names of the two hacked firms have not been revealed, reports suggest that one of them is based in the Bay Area.
One of the most prominent trade, which the hackers benefited from, was buying the shares of Altera in 2015. This indicates that one of the hacked firms was representing Intel in its acquisition of the integrated circuit manufacturer. This trade alone is said to have helped the hackers make a $1.4 million profit.