U.S. authorities broke up an alleged insider trading ring that relied on computer hackers to pilfer corporate press announcements and then profited by trading on the sensitive information before it became public.
In morning raids in Georgia and Pennsylvania, federal agents arrested five men in the plot, while four others indicted on hacking and securities fraud charges remain at large.
The hackers, who are thought to be in Ukraine and possibly Russia, allegedly infiltrated the computer servers of PRNewswire Association LLC, Marketwired and Business Wire, a unit of Warren Buffett’s Berkshire Hathaway Inc., over a five-year period.
They siphoned more than 100,000 press releases including corporate data on earnings that could be used to anticipate stock market moves and make profitable trades.
The hackers passed the information to associates in the U.S., who allegedly used it to buy and sell shares of dozens of companies, including Panera Bread Co., Boeing Co., Hewlett-Packard Co., Caterpillar Inc. and Oracle Corp., through retail brokerage accounts.
