US charges 3 Chinese citizens with trading on info hacked from law firms
The United States has criminally charged three Chinese citizens with generating millions of dollars through hacking into two American law firms.
Iat Hong, Bo Zheng and Chin Hung were charged with conspiracy, insider trading, wire fraud and computer intrusion, US prosecutors said on Tuesday.
Hong, 26, was arrested on Sunday in Hong Kong and charged along with Zheng and Hung in an indictment filed in a federal court in New York City.
According to authorities, an insider trading scheme enabled the three men to make over $4 million in illegal proceeds in less than two years.
Beginning in April 2014, the trio hacked two US law firms and the email accounts of partners at the firms who worked on high-profile mergers and acquisitions, prosecutors said.
They then used the information they gained to buy shares of at least five publicly traded companies before the details were published.
When the acquisitions were announced, they sold off their stocks and made huge profits, according to the indictment.
In early 2015, they managed to exfiltrate 2.8 gigabytes of confidential data which included details about tech giant Intel’s plans to acquire Altera, an integrated circuit maker.
They used the details and bought more than 210,000 shares of Altera before the merger was publicized on March 27, the prosecutors said, adding they then sold that stock after Altera’s share prices went up by about 26 percent as a result of the deal.
“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,” US Attorney Preet Bharara said in a statement.
The three men were also charged by the Securities and Exchange Commission this week with fraudulently trading on hacked data.
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