Three men made $4m by Hacking US M&A Lawyers

The men are alleged to have obtained inside information from two firms by hacking their networks. Once they obtained access to the law firms’ networks, they targeted email accounts of law firm partners who worked on high-profile M&A transactions.

That information was used to purchase stock in five companies before public announcements were made. By purchasing these shares before the public announcements were made, they made $4m!

Preet Bharara, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of IAT HONG and the unsealing today of a 13-count superseding indictment charging HONG, BO ZHENG, and CHIN HUNG (the “Defendants”). The Defendants are charged with devising and carrying out a scheme to enrich themselves by obtaining and trading on material, nonpublic information (“Inside Information”), exfiltrated from the networks and servers of multiple prominent U.S.-based international law firms with offices in New York, New York (the “Victim Law Firms”), which provided advisory services to companies engaged in corporate mergers and acquisitions (“M&A transactions”). The defendants targeted at least seven law firms as well as other entities in an effort to unlawfully obtain valuable confidential and proprietary information. HONG, a resident of Macau, was arrested on these charges on December 25, 2016, in Hong Kong and is now pending extradition proceedings. HONG was presented for an initial appearance on December 26, 2016, before a Judge in Hong Kong and is expected to have his next court appearance on January 16, 2017.

Source: Manhattan U.S. Attorney Announces Arrest Of Macau Resident And Unsealing Of Charges Against Three Individuals For Insider Trading Based On Information Hacked From Prominent U.S. Law Firms | USAO-SDNY | Department of Justice