Posted On Beijing Bulletin, Thursday 29th December, 2016
The U.S. Securities and Exchange Commission (SEC) has charged three Chinese nationals with multi-million dollar cyber fraud in New York for attempting to hack into the computers of seven American law firms advising on company mergers.
All three were charged in a 13-count federal criminal indictment and sued civilly by the SEC.
According to the SEC, Iat Hong, Bo Zheng, and Hung Chin specifically hacked into the networks of two top law firms, making $4 million in less than two year by using information they obtained to trade stocks of the companies pegged for acquisition.
One of the accused has reportedly been arrested in Hong Kong and is currently awaiting extradition to the United States.
The two other have still not been caught.
The three Chinese men have been charged with conspiracy, insider trading, wire fraud and computer intrusion.
“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,” said Manhattan U.S. Attorney Preet Bharara in a statement, announcing his office’s 13-count indictment against the stock traders.
The hacked law firms were not named, but firms involved in the deals cited by prosecutors include law firms Cravath Swaine & Moore and Weil Gotshal & Manges, which the Wall Street Journal had reported were hacked earlier this year.
The indictment says that among the deals the trio are alleged to have profited from was German company Roche’s purchase of drug maker Intermune in 2014, the acquisition of e-commerce company Borderfree by Pitney Bowes Inc and Intel Corp’s purchase of circuit manufacturer Altera Corp.
The latter two deals were completed in 2015.