Hackers Broke Into an SEC Database and Made Millions on Non-Public Information

via CNBC:

  • Federal prosecutors unveil charges against seven individuals Tuesday in an international stock-trading scheme that involved hacking into the SEC’s corporate filing database.
  • The operation, taking place from May to at least October 2016, nets $4.1 million for fraudsters from the U.S., Russia and Ukraine, prosecutors say.

Federal prosecutors unveiled charges in an international stock-trading scheme that involved hacking into the Securities and Exchange Commission’s EDGAR corporate filing system.

The scheme allegedly netted $4.1 million for fraudsters from the U.S., Russia and Ukraine. Using 157 corporate earnings announcements, the group was able to execute trades on material nonpublic information. Most of those filings were “test filings,” which corporations upload to the SEC’s website.

The charges were announced Tuesday by Craig Carpenito, U.S. Attorney for the District of New Jersey, alongside the SEC, the Federal Bureau of Investigation and the U.S. Secret Service, which investigates financial crimes.

The scheme involves seven individuals and operated from May to at least October 2016. Prosecutors said the traders were part of the same group that previously hacked into newswire services.

Carpenito, in a press conference Tuesday, said the thefts included thousands of valuable, private business documents. “After hacking into the EDGAR system they stole drafts of [these] reports before the information was disseminated to the general public,” he said.