23 September 2017
visit www.avoka.com

Chinese hackers made $3 million trading on confidential M&A data swiped from corporate lawyers

12 May 2017  |  8389 views  |  0 Stock exchange screen

Three Chinese citizens who traded on insider information by hacking into the systems of two New York-based law firms have been fined $8.8 million by the Securities and Exchange Commission.

Iat Hong, Bo Zheng, and Hung Chin made almost $3 million in illegal profits by tapping into non-public information relating to upcoming mergers and acquisitions.

The three defendants gained access to all e-mail accounts at the unidentified firms and downloaded gigabytes of data after installing malware on their corporate networks. Five other law firms were targeted but the culprits failed to penetrate their defences.

The SEC said that they spent approximately $7.5 million in a one-month period buying shares in semiconductor company Altera Inc. in advance of a 2015 report that it was in talks to be acquired by Intel Corporation.

Within 12 hours of emails being extracted from one of the firms, Hong and Chin allegedly began purchasing shares of e-commerce company Borderfree so aggressively that they accounted for at least 25% of the company’s trading volume on certain days in advance of the announcement of a 2015 deal.

Hong and Zheng also allegedly traded in advance of a 2014 merger announcement involving InterMune, a pharmaceutical company.

“We used enhanced trading surveillance and analysis capabilities that we developed over the last few years to identify the broad scope of the defendants’ alleged scheme, including the use of both US and offshore accounts to carry it out,” says Stephanie Avakian of the SEC’s Enforcement Division. “This action demonstrates our commitment and effectiveness in rooting out cyber-driven schemes no matter how sophisticated.”

The men remain at large, having failed to respond to the charges.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Hong Kong to tighten cyber-security rules in wake of multiple stock hacks

Hong Kong to tighten cyber-security rules in wake of multiple stock hacks

10 May 2017  |  9135 views  |  0 comments | 14 tweets | 11 linkedin
How hackers took complete control of a legit Brazilian bank

How hackers took complete control of a legit Brazilian bank

05 April 2017  |  12652 views  |  1 comments | 20 tweets | 36 linkedin
SOFE Berlin: Social media and IoT providing a goldmine for hackers

SOFE Berlin: Social media and IoT providing a goldmine for hackers

24 November 2016  |  14919 views  |  0 comments | 7 tweets | 4 linkedin
Hackers tell investment bank to pay up or stolen documents will be released

Hackers tell investment bank to pay up or stolen documents will be released

29 September 2016  |  7160 views  |  0 comments | 13 tweets | 5 linkedin
SEC bills cyber threats as biggest risk to financial markets

SEC bills cyber threats as biggest risk to financial markets

18 May 2016  |  5641 views  |  0 comments | 6 tweets | 11 linkedin
Goldman Sachs compliance staffer charged with insider trading

Goldman Sachs compliance staffer charged with insider trading

26 November 2015  |  6826 views  |  0 comments | 10 tweets | 4 linkedin
SEC expands use of Palantir big data software to catch insider traders - Reuters

SEC expands use of Palantir big data software to catch insider traders - Reuters

01 October 2015  |  8190 views  |  0 comments | 10 tweets | 3 linkedin
Power in numbers: Two Capital One staff charged for mining database to predict stock prices

Power in numbers: Two Capital One staff charged for mining database to predict stock prices

30 January 2015  |  9348 views  |  3 comments | 13 tweets | 10 linkedin
Watchdog criticises SEC cybersecurity

Watchdog criticises SEC cybersecurity

22 April 2014  |  5127 views  |  0 comments | 6 tweets | 3 linkedin
SEC to conduct market-wide cyber-security checks

SEC to conduct market-wide cyber-security checks

16 April 2014  |  6013 views  |  0 comments | 3 tweets | 3 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.temenos.comvisit www.vasco.comvisit www.sibos.com

Top risk & regulation topics

Most viewed Most shared
European Commission makes fintech a priority in supervisory shakeupEuropean Commission makes fintech a priori...
7755 views comments | 31 tweets | 45 linkedin
ISO 20022: The common language of choiceISO 20022: The common language of choice
7514 views comments | 1 tweets | 2 linkedin
Canadian fintech startups get Sibos showcaseCanadian fintech startups get Sibos showca...
5914 views comments | 11 tweets | 8 linkedin
hands typing furiouslyNavigating the financial storms with a leg...
5410 views 0 | 2 tweets | 1 linkedin

Featured job

Find your next job