Today on Compliance Week, columnist John Stark wrote about what he calls “outsider trading” — the “next wave for both hackers and securities swindlers.” Outsider trading, Stark explains, is when an insider trader obtains valuable inside information through “virtual” tactics (i.e., hacking) and then engages in securities trades to profit from that information.
Right on cue, the DOJ and SEC both announced high-profile cases today against a large group of hackers and traders who carried out an outrageously brazen scheme. According to the DOJ, over a five year period going back to February 2015, five defendants engaged in an international computer hacking and trading scheme in which they hacked into the computer networks of Marketwired, PR Newswire Association, and Business Wire. The defendants allegedly stole more than 150,000 confidential press releases from these newswires’ networks and executed trades based on this stolen information that generated more than $30 million in illegal profits.
