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Chinese Traders Charged With Insider Trading on Hacked Information (usatoday.com)
Chinese traders hacked into the computer systems of U.S. law firms that handle mergers, then used the data for insider trading that generated more than $4 million in illegal profits, federal prosecutors and regulators charged Tuesday. From a report on USA Today: The suspects in the alleged criminal marriage of cyber-hacking and securities fraud targeted at least seven law firms and other entities that handle the sensitive and often lucrative legal work of advising companies pursuing mergers and acquisitions, according to a 13-count superseding indictment unsealed in New York. Operating from April 2014 through late 2015, the alleged scheme ultimately gained access to secret information from two law firms about pending corporate deals, prosecutors charged. The suspects allegedly prized, targeted and gained access to the emails of attorneys directly involved in the deals. Prosecutors charged they exchanged a list of partners who performed such work at one of the firms before hacking into that firm's computer system.
I work in the legal technology field and this is a huge challenge for the industry. There have been warnings going around for the last year about hackers targeting law firms, and those warnings are likely a response to this.
Law firms are easy targets. Lawyers are full of hubris and not very computer savvy. Law firms are always trying to pinch pennies and IT budgets are often first on the chopping block. Because the firms do not truly understand computers or security, it is difficult to get them to spend the money necessary to secure their networks.