Remember the group of enterprising young hackers from the Ukraine, whose business model involved breaking into networks that published corporate press releases, lifting ones that hadn't been distributed yet, and selling them to individuals looking to score some material non-public information to trade on? Who reached would-be customers producing YouTube videos demonstrating the services they'd provide? One of those customers has just pleaded guilty.
“I knew that this inside information was being passed to traders like myself and on the basis of this information, I executed trades on New York stock exchanges,” he said. “It was bad judgment and I am very sorry.” Momotok, 48, was one of nine people charged in a case that federal prosecutors in Brooklyn and New Jersey described last year as the largest scheme of its kind ever prosecuted in both the scope of the alleged hacking and the number of traders involved...The case highlights an unusual intersection of securities fraud and hacking. Prosecutors said the ring employed a criminal alliance of traders and hackers who infiltrated PR Newswire Association LLC, Marketwired Inc. and Business Wire, obtaining more than 150,000 unpublished news releases ahead of market-moving news. Traders made about $30 million in illicit gains.