Estonian Hackers Charged With Cracking Business Wire

The Securities and Exchange Commission (SEC) went after two Estonian
men, charging them with hacking Business Wire, distributor of
corporate press releases. The SEC say they utilized information
gleaned to make profitable trades.

Lohmus, Haavel & Viisemann, an Estonian financial services firm and
more specifically, two of its employees, Oliver Peek and Kristjan
Lepik with a scheme involving electronic theft and trading of more
than 360 confidential press releases issued by more than 200 U.S.
companies. The SEC says since January 2005, the company has made at
least $7.8 million in illegal profits.

"Our action today demonstrates that we will seek out and stop
securities fraud wherever we find it. Whether in an old-fashioned
boiler room or, as in this case, in the high-tech environs of the
internet, such conduct will be met with a swift and vigorous
enforcement response," said Linda Chatman Thomsen, Director of the
Commission's Division of Enforcement.

The Commission's complaint alleges that, in June 2004, Lohmus became a
client of Business Wire for the sole purpose of gaining access to
Business Wire's secure client website.

Once defendants had access, they surreptitiously utilized a software
program, a so-called "spider" program, which provided unauthorized
access to confidential information contained in impending nonpublic
press releases of other Business Wire clients, including the expected
time of issuance.

The complaint further alleges that the information fraudulently stolen
by the defendants has allowed them to strategically time their trades
around the public release of news involving, among other things,
mergers, earnings, and regulatory actions.

Using several U.S. brokerage accounts, the defendants have bought long
or sold short the stocks of the companies whose confidential press
release information they have stolen, and purchased options to
increase their profits.

This is another dimension to hacking and cybercrime. These gentlemen
managed to garner access to the internal workings of a major press
release distribution network and used the information to their
advantage.

Many times the crimes are denials of service or phishing scams but
this is no less significant and one more area that could stand to be
watch a little more closely.

www.securitypronews.com