Prosecutors with the U.S. Attorney’s office in New Jersey initially announced the indictment of nine people, five of whom were arrested in Georgia and Pennsylvania, Tuesday morning. A follow-up announcement in Newark revealed that 32 people connected to the scheme in total were facing charges.
According to Reuters, it’s the first time that prosecutors have brought criminal charges against individuals for perpetrating a securities fraud scheme involving hacked insider information.
The hackers purportedly infiltrated servers belonging to press release agencies: PRNewswire Association, Marketwire, and the Berkshire Hathaway subsidiary Business Wire, first accessing the newswires’ networks as early as 2010. Once they were in, over the course of five years, the hackers passed along sensitive information – some of which pertained to large Fortune 500 companies – to traders, who then used it to their benefit.
A related SEC complaint filed in tandem with the indictments notes that civil charges are being brought against 32 individuals and claims the hackers used “malicious programming code and other deceptive techniques to hack into the computer systems.”