US authorities break up insider trading ring using Ukraine hackers

New York

EXPOSING a new front in cybercrime, US 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 of nine men accused in the insider trading plot. Four others were indicted on hacking and securities fraud charges but 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 several years, they siphoned 150,000 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 their associates in the US, 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 their retail brokerage accounts. Money was then shifted offshore through Estonian banks, according to a person familiar with the matter. The scheme allegedly netted more than …