Ukrainian hackers, US traders made $30M in scam, feds say

In total, they pilfered information from more than 150,000 news releases, the indictments said.

Home Depot, Panera Bread and Hewlett Packard were among the hundreds of companies whose information was traded in the press releases. In December, Milpitas, Calif.-based FireEye FEYE, -1.37% said that in a yearlong investigation, it found a hacking group that targeted the email accounts of individuals who handled confidential information at more than 100 publicly traded companies.

At various times, the indictment alleges, the hackers were locked out of the news services’ computer systems. The e-mail from Ukraine was allegedly sent by a young hacker there in October 2010, as the billionaire Raj Rajaratnam was facing trial in the U.S.in one of the most watched insider-trading cases since the days of Ivan Boesky.

The charges in the Brooklyn and New Jersey U.S. attorneys offices are expected to reveal information about the complex online black market.

Its also a great equalizer.

Five people were arrested Tuesday, the Department of Justice said in a statement. The authorities expect to discuss the charges at a news conference on Tuesday in Newark, New Jersey, to be attended by a number of top law enforcement officials, including Jeh Johnson, the secretary for homeland security, and Mary Jo White, the chairwoman of the SEC. The hackers and some defendants remain at large. Its unclear if the fund is still in operation.

The criminal charges include securities fraud, wire fraud, conspiracy to commit money laundering and aggravated identity theft. Also named in that case are Vladislav Khalupsky, Leonid Momotok and Alexander Garkusha.

The real challenge for authorities was tracking down trades and tying it to hacks.

Caterpillar’s news release was publicly distributed on January 26, 2012.

The stock rose 2 percent from $109.05 to $111.31 that day. The supposed take: as much as $100 million. They work in real estate and construction and operate a myriad of LLCs that appear to be covers for their trading operations, according to public records. The securities fraud conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss.

Federal authorities in New Jersey said Tuesday it is the biggest scheme of its kind ever prosecuted.

According to authorities, the hackers used a variety of common tactics to infiltrate the computer servers of three systems used by many corporations to release news such as earnings reports, mergers and acquisitions and executive changes.

“As a result, the trader defendants had an unfair trading advantage over other market participants”.

Attorneys for the defendants couldnt be immediately reached for comment. She said those charged “went to great lengths to evade detection” and the SEC sorted through millions of traders, thousands of earnings announcements and gigabytes of data.

The hackers managed to net $30 million, according to federal prosecutors.

For more than two years, investigators unraveled the scheme and the trades, which continued until recently, say people familiar with the investigation. This allowed the schemers to make trades on them before the deals became public.

Business Wire and PR Newswire said they’re cooperating with prosecutors and examining their security systems.

The traders created wish lists for the hackers of their desired upcoming press releases from Marketwired and PR Newswire. The alleged global plot unfolded in chat rooms in the dark web, where U.S. traders teamed with hackers in Eastern Europe to conspire on a newfangled approach to insider trading. They are accused of making $30m (£20m) from the Wall Street scam.