Hacker used stolen press releases for insider trading

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Hacker used stolen press releases for insider trading

Staff credentials bought on black market.

A Ukrainian man has become the first hacker to plead guilty to a worldwide scheme to hack into services that distribute corporate news releases, and use the stolen information to conduct insider trading.

Vadym Iermolovych, 28, of Kievm, today joined three traders in admitting criminal wrongdoing over the largest known hacking scheme designed to game financial markets, resulting in more than US$100 million (A$136 million) of alleged illegal profit.

The defendant had not previously been linked publicly to the alleged theft of more than 150,000 news releases from Business Wire, Marketwired and PR Newswire between February 2010 and August 2015, and subsequent trades based on the stolen content.

Ten defendants, including three hackers and seven traders, have been criminally charged by federal prosecutors in New Jersey and Brooklyn.

More than 40 individuals and entities were also charged civilly by the US Securities and Exchange Commission.

Iermolovych pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft, US attorney Paul Fishman in New Jersey said.

K. Anthony Thomas, a public defender representing Iermolovych, did not immediately respond to requests for comment.

Authorities have said traders, including many with ties to Russia, gave hackers "shopping lists" of releases they wanted to see in advance, including financial results, and then traded in companies such as Caterpillar, Home Depot, Las Vegas Sands and Panera Bread.

Iermolovych admitted to hacking PR Newswire between January and March 2013, after buying an employee's credentials that had been stolen in a hack on a social networking website.

The defendant also admitted to selling news releases stolen from Marketwired for tens of thousands of dollars, and buying access to Business Wire's network, court papers show.

Iermolovych had been arrested in November 2014 on other charges related to computer hacking and credit card fraud.

He entered his plea before US district judge Madeline Cox Arleo in Newark, New Jersey. Iermolovych faces roughly 5.5 to 6.5 years in prison under recommended federal guidelines at his August 22 sentencing.

The other accused hackers include Oleksandr Ieremenko and Ivan Turchynov, both of Ukraine. Their whereabouts were not immediately known.

Business Wire is a unit of Warren Buffett's Berkshire Hathaway, PR Newswire is a unit of UBM being sold to Chicago-based Cision. Marketwired is owned by Nasdaq. None was accused of wrongdoing.

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