Feds: Ukrainian Group Made $30M With Hacked Press Release Info

A group of Ukrainian hackers worked with securities traders in the U.S. to make $30 million by breaking into the computers of companies that put out corporate press releases and trading on the information before it was made public, federal prosecutors said Tuesday.

Prosecutors in New Jersey and New York City, along with Homeland Security Secretary Jeh Johnson and Securities and Exchange Commission chief Mary Jo White, planned to outline the charges at a late-morning news conference.

An indictment against five people was unsealed in Newark, and another was filed under seal in New York City. The group includes two people described as Ukrainian computer hackers and two securities traders from Alpharetta, Georgia.

They were charged with 23 counts, 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, identified as Arkady Dubovoy, Pavel Dubovoy and Igor Dubovoy, 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 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, it made more than $1.4 million trading shares of 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.