Three Chinese citizens accused of hacking into computers of American law firms advising on company mergers have been charged with multi-million dollar cyber fraud in New York.
They made more than $4 million (S$5.8 million) in illicit profits after breaking into the servers of top corporate law firms in New York, the United States said in announcing charges and the arrest of one of the men.
The three targeted at least seven major law firms, retained by companies to advise on deals, and got into the e-mail accounts of senior lawyers at two of the firms, according to the indictment on Tuesday.
They profited from deals and speculation involving the drug-maker Intermune, chipmaker Intel and business services company Pitney Bowes, the US said.
The case places law firms among the widening group of targets of cybercriminals seeking to profit from insider information.
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.