Slashdot Mirror
US Busts Insider Trading Hackers
An anonymous reader sends news that U.S. authorities have dispersed an insider trading ring that broke into remote servers to grab press releases before their official publishing date. The group hacked into organizations called PRNewswire, Marketwired, and Business Wire, taking as many as 150,000 press releases over the past five years, including those involving earnings reports. The information was sold to other people who used it to buy and sell stocks. The nine people targeted in this sting netted approximately $30 million, while an SEC lawsuit targeting 32 individuals says the take was more like $100 million. Their scheme is a new type of distributed insider trading that didn't rely on leaked information from employees of any of the targeted companies. "They ran this like a business. They provided customer support: The hackers allegedly set up servers for their customers to access their information, and 'created a video tutorial on how to access and use one of the servers they used to share the Stolen Releases.' They responded to customer feedback ... Their fees were performance-based, and the performance was audited."
Hackers go to jail for insider trading because it rips off punters without access to the inside information.
So what about High-frequency trading? Investment bankers pay a premium to the stock exchange to connect their computers closer than everyone elses. They get inside information microseconds before those same punters, and milk them for it, and it's all legit. Isn't High-frequency trading just another kind of insider trading?
http://www.motherjones.com/pol...
http://www.nytimes.com/2014/04...
http://www.wsj.com/articles/re...
http://faculty.chicagobooth.ed...