Cyber criminals 'hacked law firms'

| Author: Secretariat | Filed under: General News
Cyber criminals 'hacked law firms'

Cyber criminals have been targeting major law firms in what may have been an attempt to gather data for insider trading deals, according to reports.

The Wall Street Journal said that a number of US companies had had their computer systems compromised.
The FBI would not confirm whether or not an insider trading investigation was under way.

Earlier in the year, security company Flashpoint had warned some firms that hackers were targeting legal offices.
A spokeswoman for Flashpoint was not able to comment in detail on the alert sent to law firms, but told the BBC: "All the details surrounding any activity have been turned over to the authorities and they are handling the situation from there."

Law firm Cravath Swaine & Moore LLP confirmed to the BBC that it suffered a "limited breach" last summer.
"We are not aware that any of the information that may have been accessed has been used improperly," the statement said.

Bogus emails

The rising threat of hacking has been noticed by many in the legal industry.

Recently, attempts to compromise the security of law firms' computer networks have been detected by clients of London law office CMS, which brokers cybersecurity insurance policies for a range of companies.

"We've seen examples of emails [at client law firms] that purport to come from a managing partner to a more junior lawyer directing them to make payments to an account or to send certain information to an address," Stephen

Tester, a partner at CMS, told the BBC.

"They can look very much like a regular message."

Law firms had even reported breaches of their video-conferencing systems, commented Mr Tester.

"There are ways in which people can go into video-based conferencing facilities and literally listen in on meetings," he said.

He added that while the issue was a growing concern for all businesses, he felt law companies were in a special position because of the sensitivity of the data they held.

Last year, a ring of alleged insider trading hackers was apprehended after they were accused of netting more than $100m (£70m) in illegal profits.

The group was accused of stealing sensitive financial information from wire news services before it had been published.

Three Chinese hackers have been ordered to pay $8.8m (£6.8m) over a multi-million dollar insider trading scam.

The US Securities Exchange Commission (SEC) said Iat Hong, 26, Bo Zheng, 30, and Hung Chin, 50, breached the websites of US law firms and accessed confidential information about mergers and acquisitions.

They then used this information to profit on the stock market.

The men, who have not been extradited, were fined in their absence.

According to the SEC, which charged the men in December, they racked up almost $3m (£2.3m) in illegal profits by hacking two prominent New York law firms.

This involved installing malware to access and download gigabytes of confidential emails, it said.

The trio then bought shares in listed companies ahead of announcements about their merger plans - something that often causes stock to jump.

In a judgement on 5 May, the Southern District of New York said the accused had accepted liability by failing to respond to the allegations.

It said each should pay a the maximum penalty available, as well as returning their ill-gotten gains.

Mr Hong must pay $1.8m, Mr Zheng, $1.9m, and Mr Chin, $4m. Any US assets they own will also be frozen.

Mr Hong's mother, Sou Cheng Lai, has meanwhile been ordered to return more than $900,000 of illicit profits held on behalf of her son.

The men still face a variety of other charges and, if found guilty, could face lengthy prison terms.

The counts against them include conspiracy to commit securities fraud, conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer intrusion, unlawful access, and intentional damage.

Source: BBC

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