Group made $30M with hacked press release info

U.S. prosecutors will announce the indictment of nine individuals on Tuesday on charges they were part of an insider trading ring based on cyber hacking of disseminators of news releases, according to a person familiar with the matter.

The victim newswires – PRNewswire, Marketwired, and Business Wire – are in the business of disseminating information on behalf of companies such as Bank of America, Boeing, Caterpillar, Hewlett Packard, Netflix, Panera Bread and Texas Instruments. The scheme netted more than $30 million, said the person.

The case, introduced collectively by the D.J. Attorney’s workplaces in Brooklyn and New Jersey, marks the primary time prosecutors have alleged that a securities fraud scheme was based mostly on hacked inside info.

No further details were immediately available, but the source said the case is not believed to be related to the ongoing SEC investigation of insider trading tied to a hacker group that has been dubbed FIN4. Whatever the nine men’s connections, they are missing those common to numerous major cases brought by New York prosecutors in recent years, things like Ivy League schools and Wall Street employers and top consulting firms.

A spokeswoman for the FBI said five of the defendants have been arrested.

Hackers are accused of accessing data being processed by financial “wires” in order to obtain information about companies before it was made public. The hackers would then pass on the information to the traders sometimes through emails saying read “fresh stuff”, according to the indictment. That information was then used to make advantageous stock transactions, which federal authorities have said is a form of insider trading.

Last winter, FireEye Inc., a Silicon Valley cybersecurity company, said it had told the Federal Bureau of Investigation about hackers who appeared to be focused on specific pieces of information that could affect the market.

Federal prosecutors in New Jersey and New York City, along with Homeland Security Secretary Jeh Johnson and Securities and Exchange Commission Chairwoman Mary Jo White, will discuss the case during a news conference Tuesday in Newark, New Jersey.

-Chelsey Dulaney, Jean Eaglesham and Danny Yadron contributed to this article.