On Tuesday, U.S. authorities revealed that they had broken up the insider trading ring, which raked in over $30 million in illegal profits, and are set to file criminal charges against 9 people, according to The New York Times.
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The charges range from wire fraud to securities fraud to aggravated identity theft.
The group, operating in the US and Ukraine, allegedly netted more than $30m (£19m) in illegal profits.
Federal charges including conspiracy to commit securities fraud and hacking are expected to be filed against the nine men in Brooklyn and New Jersey, while the SEC is pursuing a parallel civil case against some of the suspects. Align Technology didn’t immediately respond to a request for comment. He ran a mutual fund and worked on Wall Street before starting his own hedge fund. The rest of the group lacks similar financial credentials.
The indictment in New Jersey also mentions four co-conspirators: two securities traders from Georgia and broker-dealers from Brooklyn and Pennsylvania.
Prosecutors believe that since February 2010 Ukranian hackers gained entry to newswire systems and swiped around 150,000 press releases containing access to sensitive information about company deals and earnings prior to their public release.
Until now, the SEC had brought only a handful of civil cases against individual hackers. The intruders would then obtain information from confidential statements about unannounced deals, and use them to make early trades before those agreements were made public.
Cyberattacks have long targeted information that could be handy for investors trying to gain an illegal advantage.
Last winter, FireEye Inc., a Silicon Valley cybersecurity company, said it had told the Federal Bureau of Investigation about hackers who appeared to be focused on specific pieces of information that could affect the market.
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“Access to insider information that could make or break stock prices for over 80 publicly traded companies could surely put FIN4 at a considerable trading advantage”, FireEye said in its report. But the firm said it wasn’t aware of any irregular trading linked to their findings. Top officials from those agencies, including Jeh Johnson, U.S. secretary of homeland security, and SEC Chairman Mary Jo White, are expected to travel to New Jersey to announce the charges, people familiar with the matter said.
