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9 accused of making $30 million using hacked press releases

By DAVID PORTER
Associated Press

NEWARK, N.J. (AP) - An international group of hackers and stock traders made $30 million by breaking into the computers of Newswire Services that put out corporate press releases and trading on the information before it was made public, federal prosecutors said Tuesday.

Nine people in all were charged in indictments unsealed in New Jersey and New York City.

The group consisted of two people described as Ukrainian computer hackers, six stock traders - all but one of them in the U.S. - and one U.S. real estate developer. They were charged with offenses including securities fraud, computer fraud and conspiracy to commit money laundering.

Prosecutors said that starting in 2010, the hackers gained early access to 150,000 news releases from services including Marketwired of Toronto, Canada; PR Newswire, based in New York, and San Francisco-based Business Wire. The news releases contained earnings figures and other corporate information.

The traders then used the information to make trades before the releases came out, exploiting a time gap ranging from hours to three days, prosecutors said.

The hackers were paid based on how much in profits the traders made, prosecutors alleged. They also allegedly created a how-to video on gaining access to the stored press releases.

Business Wire said it has hired a cybersecurity firm to test its systems and make sure they are secure. Marketwired and PR Newswire did not immediately return emails seeking comment.

The group made more than $600,000 by trading the stock of Peoria, Illinois-based Caterpillar Inc. in 2011 using a news release that said the company's third-quarter profits had climbed 27 percent, according to the indictment.

Similarly, the group made more than $1.4 million trading stock in San Jose, California-based Align Technology in 2013 ahead of a press release that said annual revenue was up more than 20 percent, the indictment said.

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Associated Press writers Bree Fowler and Joseph Pisani, in New York, contributed to this story.

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