Newswire hacker convicted over role in $30 million insider trading scheme

Newswire hacker convicted over role in $30 million insider trading scheme

A Ukrainian hacker has pleaded guilty to his part in an international scheme to hack into three business newswires, steal yet-to-be published press releases and make trades that allegedly generated approximately $30 million in illegal profits.

Vadym Iermolovych, 28, of Kiev, Ukraine, is the first hacker convicted in a conspiracy to steal 150,000 press releases from three major newswire companies for use in illicit trading. Iermolovych pleaded guilty before US District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. he was given a two-and-a-half-year jail sentence.

He joins four other members of the gang behind the thefts to have lodged a guilty plea. Four securities traders involved in the conspiracy have also been charged.

At the plea hearing, Iermolovych admitted that he was personally involved in the hacks into the Marketwired, PR Newswire and Business Wire databanks. He admitted to hacking into PRN’s network between January 2013 and March 2013. He also admitted that he obtained a set of user credentials of PRN employees stolen from a computer hack into a social networking website and then used at least one of those credentials to ultimately gain access into PRN’s computer network.

The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN. Information on hundreds of companies were targeted in the scheme, including Align Technology Inc., Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread Co., and Verisign Inc.

The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the $30 million profit the traders made from their illegal trading activities.

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