U.S. charges Chinese traders with hacking law firms, stealing insider information

The men are accused of making more than $4 million in profit off of stock trades based on information they stole from email accounts at two law firms.
By Stephen Feller  |  Dec. 27, 2016 at 10:06 PM
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WASHINGTON, Dec. 27 (UPI) -- The United States has charged three Chinese men with hacking into the servers of several corporate law firms and using information they found to make millions in profits.

Iat Hong, Chin Hung and Bo Zheng were charged on Tuesday with targeting seven law firms and accessing email accounts for senior lawyers, allowing them to make more than $4 million on investments based on information they stole from the accounts.

While the law firms were not identified in the indictment, information on companies being targeted for acquisition helped the trio benefit from speculative stock purchases because of their inside line on what could happen with sales of the companies.

"This case of cyber meets securities fraud should serve as a wake-up call for law firms around the world: you are and will be targets of cyber hacking, because you have information valuable to would-be criminals," Preet Bharara, U.S. attorney for the southern district of New York, said in a statement.

The hackers stole information about an aborted deal for the drug company Intermune, computer chip maker Intel's deal to acquire the chip maker Altera and Pitney Bowes' acquisition of online commerce website Borderfree.

Information on all three deals came from gaining access to email accounts at two law firms, however the trio tried and failed to access servers at five other law firms more than 100,000 times during 2015.

The three men were also charged by the Securities and Exchange Commission for the crimes, which said it caught them by using "enhanced trading surveillance and analysis capabilities" to discover the information breaches -- which also included the schematics for robotic products stolen from two companies, in addition to the other information.

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