Five defendants were arrested, while arrest warrants were issued for four others in Ukraine. They were charged with offenses including securities fraud, computer fraud and conspiracy to commit money laundering.
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According to the indictment, the conspirators hacked into the news services’ computer networks to gain access to unpublished news releases that contained nonpublic information about companies.
Prosecutors charged Vitaly Korchevsky, of Glen Mills, Pennsylvania; Vladislav Khalupsky, of New York City and Ukraine; Leonid Momotok, of Suwanee, Georgia; and Alexander Garkusha, of Alpharetta, Georgia. Align Technology didn’t immediately respond to a request for comment.
An global group of hackers and stock traders made $30 million by breaking into the computers of newswire services that put out corporate press releases and trading on the information before it was made public, federal prosecutors said Tuesday.
Business Wire said it has hired a cybersecurity firm to test its systems and make sure they are secure.
The three press release distributors that were hacked were Marketwired, PR Newswire and Business Wire. The group includes two Ukrainian men who are believed to be the hackers, plus 30 other people from the U.S. and elsewhere who made the stock trades.
Among the companies whose shares were affected were Caterpillar Inc., Acme Packet Inc., Edwards Lifesciences Inc. and VeriSign Inc.
The SEC initially filed fraud charges under seal on August. 10 in the U.S. District Court in Newark, N.J. The Justice Department announced criminal charges against several of the same defendants, including the alleged hackers, Ivan Turchynov and Oleksandr Ieremenko.
The traders would then use the information to make early trades on the deals, exploiting the small window of time between news releases being uploaded into the system and the public announcement of the deals. Additionally they allegedly created a how-to video on getting access to the saved press releases.
Federal prosecutors in New Jersey and New York City, along with Homeland Security Secretary Jeh Johnson and Securities and Exchange Commission Chairwoman Mary Jo White, will discuss the case during a news conference Tuesday in Newark, New Jersey.
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Nine people were charged in Brooklyn, New York and Newark, including Ukrainian hackers and security traders.
