Law Firm Partners Who Just Learned What The Internet Is Now Learning What ‘Hacking’ Is

A bunch of hackers have figured out that law firms might be a wealth of inside information.

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Updated:: Jan 14, 2019
Original:: Mar 30, 2016

I told you not to put these things so close to the elevator.

It has occurred to some people—the people who work at them, mostly—that law firms are pretty good places to pick up some sweet black edge. This has not always ended well for those people, but it has maybe given the hacking community an idea for some new targets, because they’ve been poking around the systems of some pretty elite firms. Either that or they think, the whiter the shoe, the more susceptible to unsolicited white-power propaganda popping up on their printers. Luckily, Preet Bharara and his buddies at the FBI are on it.

The firms include Cravath Swaine & Moore LLP and Weil Gotshal & Manges LLP, which represent Wall Street banks and Fortune 500 companies in everything from lawsuits to multibillion-dollar merger negotiations….
It isn’t clear what information the hackers stole, if any, but the focus of the investigation is on whether confidential data were taken for the purpose of insider trading, according to a person familiar with the matter.

Hackers Breach Law Firms, Including Cravath and Weil Gotshal [WSJ]

SEC.App

It's like Headspace, but for insider traders.

SEC_CAT2

So don’t hold him to anything he says about it.

Quit hiding behind the bench. By Phil Roeder (Flickr: Supreme Court of the United States) [CC BY 2.0], via Wikimedia Commons

Everybody can go home.

Earlier today, Bill Hwang, the founder of the Tiger Cub's Asia-based branch, Tiger Asia, pleaded guilty to one count of wire fraud and agreed to fork over $44 million to make allegations by the SEC of insider trading in Chinese bank stocks go away. According to Hwang, his firm "regrets the actions for which is accepts responsibility today and is grateful that this matter is now resolved." According to SEC director of enforcement Robert Khuzami, who we would love to consider a side job writing fables for children* about foxes who trade on unreleased information about clinical trials of Alzheimer's drugs and take advantage of innocent hens, Hwang was a very bad boy and should serve as a cautionary tale for anyone thinking about breaking the law.

Remember, earlier this summer, when a whole bunch of banks were sued over allegations their employees manipulated Libor? And Bob Diamond, CEO of the first, and so far only, bank to settle with regulators, lost his job, as did a bunch of his colleagues? And it was suggested that Barclays's offenses were but a drop in the bucket compared with those of UBS? And experts projected that this whole thing could cost the banks being investigated (of which there are many) tens of billions of dollars to make go away? And Nellie Diamond stopped Tweeting? As much fun as that's all been, a lot of firms would like to avoid going through it again, and to that end, have asked their compliance teams to run some workshops teaching employees how to keep things on the straight and narrow. For instance, while you might think that people would have mastered email by this point on the evolutionary chart-- specifically, that it never goes away and might be read again-- you would think wrong! So the point is being hammered home in remedial electronic correspondence classes, particularly to those who'd previously not seen an issue with writing stuff like, "Anything for you, Big Boy" as a response to the request "Can you manipulate Libor for me today when you've a sec?" Also on the schedule-- mock happy hours with the team for members of the staff who can never seem to remember the appropriate response for when you're out at Punch Tavern and someone brings up "Holly with the cans who did me a solid by shaving 45 basis points off our submission." "Everyone is more paranoid, that's for sure," said one department head at a European investment bank, where the trading floor is festooned with posters reminding staff to report any suspicious behaviour. At his bank and at least one other European firm, executives said they were being asked to take part in an increasing number of behavioural coaching sessions, including simulations of pub outings. These were mainly done via webcasts, where participants act out conversations with colleagues where the talk turns to clients or office gossip, two bankers said. "You have to turn around and say, 'No, let's not talk about that'," said one. Culture Clean Up Follows Bankers To Bar [Reuters]

"We have been remarkably successful in convincing persons to cooperate with the government, and provide evidence to us, and in court of law," SEC director of enforcement Robert Khuzami said during a press conference the day the government went public with its charges of insider trading against former SAC Capital employee Mathew Martoma. To the untrained ear, Khuzami probably appeared to be speaking to no one in particular, just sending a general message to any would-be criminals out there that once the government got to their co-conspirators, it'd be all over. No one wants to do time, and everybody flips. To those who've been following Operations Perfect Hedge, though, and have watched the Feds' relentless pursuit of Steven A. Cohen, it was obvious they were sending a clear message to the Big Guy: "We got ya boy, and ya goin' down." And since its track record of getting people to turn on their colleagues and in some cases, their best friends (see: Noah Freeman/Donald Longueuil, and these guys, and these guys, and this guy) really has been "remarkably successful," and since Martoma has a wife and two young kids and his whole life ahead of him, Khuzami and Co. probably assumed they had this one in the bag. But not so.