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Crime Databases Businesses Government Security The Almighty Buck United States

Hackers Broke Into An SEC Database and Made Millions From Inside Information, Says DOJ (cnbc.com) 60

Posted by BeauHD from the insider-trading dept.
Federal prosecutors unveiled charges in an international stock-trading scheme that involved hacking into the Securities and Exchange Commission's EDGAR corporate filing system. "The scheme allegedly netted $4.1 million for fraudsters from the U.S., Russia and Ukraine," reports CNBC. "Using 157 corporate earnings announcements, the group was able to execute trades on material nonpublic information. Most of those filings were 'test filings,' which corporations upload to the SEC's website." From the report: The scheme involves seven individuals and operated from May to at least October 2016. Prosecutors said the traders were part of the same group that previously hacked into newswire services. Carpenito, in a press conference Tuesday, said the thefts included thousands of valuable, private business documents. "After hacking into the EDGAR system they stole drafts of [these] reports before the information was disseminated to the general public," he said.

Those documents included quarterly earnings, mergers and acquisitions plans and other sensitive news, and the criminals were able to view it before it was released as a public filing, thus affecting the individual companies' stock prices. The alleged hackers executed trades on the reports and also sold them to other illicit traders. One inside trader made $270,000 in a single day, according to Carpenito. The hackers used malicious software sent via email to SEC employees. Then, after planting the software on the SEC computers, they sent the information they were able to gather from the EDGAR system to servers in Lithuania, where they either used it or distributed the data to other criminals, Carpenito said.
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Hackers Broke Into An SEC Database and Made Millions From Inside Information, Says DOJ More

Hackers Broke Into An SEC Database and Made Millions From Inside Information, Says DOJ

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  • My data, my way. (Score:3, Interesting)

    by Anonymous Coward on Tuesday January 15, 2019 @08:52PM (#57970000)

    So this is where we get to put forth a lawsuit to establish legal president for the liability organizations have when collecting and holding onto user data who then lose that data to theft, right?

    Anyone can collect any amount of info on me they want. If they lose it, it puts my wellbeing in jeopardy, so I should have the right (/responsibility) to sue them for every penny they have.

  • Will get nothing from this and continue to bear the cost of public price discovery except for the institutional traders that do not use the public exchanges.
    • The criminals and profits in Russia are not seizable and given the public prosecution will likely never appear in an extraditable country. If the feds were serious, then they should have fixed the problem at the SEC and arrested and seized the criminals under sealed court orders and only announce the case details after that was complete. The SEC has not learned the lesson and does not need to continue to have a database with the Social Security numbers, dates of birth, and other personal details of all trad

      • Re: (Score:2)

        by rtb61 ( 674572 )

        Who is saying SEC agents have not learned their lessons, they probably have learned them all to well, there are many organised crime groups who are more than willing to pay for network security information, millions to be made and bribes in the tens of thousands.

        So the US controls the Ukraine but there is no extradition treaty with the Ukraine, what the fuck is going on there, you send them weapons and don't at least get criminals in return what kind of fucking idiots are you. Successful phishing attacks,

  • Did they start in orange juice futures? (Score:5, Funny)

    by Walter White ( 1573805 ) on Tuesday January 15, 2019 @09:17PM (#57970092)

    Manipulating the futures market on the morning when the report was to be released by providing a fake report to a competitor. And in the process ruining Mortimer and Randolph Duke.

  • The SEC can't even safeguard and regulate what they've already got. And for some reason, everyone's waiting with baited breath for this same group of morons to provide regulations around cryptocurrency. These people are a joke, and the reason cryptocurrency was created; to bypass the power brokers who are as fallible and/or corrupt as everyone else, who through their continual ineptitude, prop the financial systems up like the precarious house of cards they are.

  • Short the stock on a company, then reveal you--I mean, someone--hacked them. Rinse repeat. You can even do it legally [cnbc.com]. Well, maybe wait until the lawsuit plays out first before trying that maneuver.
  • Comment removed based on user account deletion

    • What I don't get it how could you have this access, and only make $4M? Only RTFS but it doesn't seem to connect. Unless they were purposely holding back on the amounts to avoid getting caught.

  • And Insider trading is not illegal to Law makers;
    http://cnbc.com/id/43471561 [cnbc.com]

    • It is now. [wikipedia.org]

      The STOCK Act is an original bill to prohibit members of Congress and employees of Congress from using private information derived from their official positions for personal benefit, and for other purposes. With this bill in place, members of Congress are no longer allowed to use information garnered through official business for personal reasons. The Stop Trading on Congressional Knowledge (STOCK) Act prohibits members and employees of Congress from using "any nonpublic information derived from the individual's position ... or gained from performance of the individual's duties, for personal benefit".

  • learn of trillion dollar bet of 90's draining southeast Asia economies leading to 9/11 coverup of SEC investigation of bet, war on Iraq distractions & wave of world economic fails we're still dealing w/ today. Who's in jail for it? Nobody! Gov allows itself insider trading.

    • Re: (Score:2)

      by 3seas ( 184403 )

      Oh yeah, what did come out of the Trillion dollar bet besides losers in the bet such as Enron, Worldcome, and more, anthrax threats to the MSM employees to keep quiet about it and the creation of the G20 summit. Go figure.Think about the story above, who is allowed by government to manipulate the world economies via world stockmarket wrongful manipulation.

  • I would imagine that hacking the SEC for this kind of info could net you more than 4.1 million. Seems like these hackers either lacked vision, or investigators didn't uncover their real game.

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