Hacker Could Keep Money from Insider Trading

Reservoir Hill brings us a New York Times story about a man who will be allowed to keep the money he gained through hacking into a computer system in order to gain early access to a company's earnings statement. From the Times: "On Oct. 17, 2007, someone hacked into a computer system that had information on an earnings announcement to be made by IMS Health a few hours later. Minutes after the breach of computer security, Mr. Dorozhko invested $41,671 in put options that would expire worthless three days later unless IMS shares plunged before that. The next morning the share price did plunge, and Mr. Dorozhko made his money by selling the puts. 'Dorozhko's alleged "stealing and trading" or "hacking and trading" does not amount to a violation' of securities laws, Judge Naomi Reice Buchwald of United States District Court ruled last month. Although he may have broken laws by stealing the information, the judge concluded, 'Dorozhko did not breach any fiduciary or similar duty "in connection with" the purchase or sale of a security.' She ordered the S.E.C. to let him have his profits."

Comments

A Very Wise Man Once Said

[Anonymous Coward]

"I am invincible!" -Boris Grishenko

Shortly after that

[GammaKitsune]

Of course he was welcome, they told him, welcome to the money. And he was going to need it. Because- still smiling- they were going to make sure he never worked again.

Re:Fair enough

[myth_of_sisyphus]

My brother works at a major pharmaceutical company. I was asking him recently about stocks and he said the following:

"I don't understand the stock market at all. We get a good FDA report and a promising drug is released, and the stock goes down. We kill 10 people and the stock goes up. Who the fuck knows?"

Re:That opens the doors

[unitron]

Won could make the argument that if he broke into the system, his access ...placed him in a trusted position...

Tell that argumentative Won guy that one who breaks into a system is pretty much de facto not trusted. :-)