I have been reporting to you for two years about developments in this ingenious and massive stock fraud since the story first broke. Forty-three people were charged both civilly and criminally in the largest hacking and securities fraud enterprise in American history. The defendants were made up of rogue stock traders including hedge fund manager and former Morgan Stanley employee Vitaly Korchevsky along with computer hackers based in the Ukraine. Now Ukranian hacker Vadym Iermolovych was sentenced to thirty months in prison and ordered to pay more than 3 million dollars in restitution for his role in this scheme.
The hackers used simple phishing tactics to gain access to more than 150,000 press releases issued by Marketwired, PR Newswire in New York and Business Wire of San Francisco on behalf of numerous American companies including Panera, Caterpillar, Inc and Align Technology that contained earnings and other corporate information prior to their public release. This enabled the rogue stock traders to make trades based on this inside information before it became known to the public. Trades using this stolen information were made by traders in Russia, Ukraine, Malta, Cyprus, France and here in the United States in Georgia, New York and Pennsylvania It is estimated that between 2010 and 2015, the defendants made profits of as much as 100 million dollars on 800 trades during this time. A number of the defendants have already pleaded guilty to charges related to this scam.
The cornerstone of this scam as so many cyberscams was the ability to hack into the company computers of Marketwired, PR Newswire and Business Wire by hacking into social media sites where they stole the passwords of employees of these companies who used the same passwords at work. The scammers also used spear phishing emails to gain the further access they needed to infiltrate the computers of the targeted companies.
One of the biggest takeaways from this case is how easy it is to still use spear phishing emails to lure people into clicking on links tainted with malware that permits hackers to steal a person’s or company’s data. Apparently corporations still have not learned to sufficiently train their employees to recognize phishing emails nor have they learned to encrypt and segregate sensitive data from hackers. This is important to all of us as individuals because identity thieves and hackers use the same phishing techniques to hack into the computers of us as individuals and steal our personal information. Never click on links in emails regardless of from whom they appear to come unless you are absolutely sure that the link is legitimate. It well could contain keystroke logging malware that will steal all of the information from your computer. Also, it is important to remember that you cannot rely on your anti-malware software to protect you because the best anti-malware software is always at least a month behind the latest malware. However, it is still important to have security software on all of your electronic devices and keep that software up to date with the latest security patches because many scammers use older versions of malware for which there are defenses.
Finally, this case also reminds us to use unique passwords for all of our accounts so that if our password is compromised at a company with lax security, our own security at other places where we use passwords is not threatened. Although it may seem difficult to have to remember so many different password, an easy way to deal with this is to have a strong base password that contains capital letters, small letters and symbols and adapt that base password for each of your accounts. Using an easily remembered phrase as the base password such as IDon’tLikePasswords is effective. Make it even better by adding a couple of symbols at the end such as IDon’tLikePasswords!!! and then adapt it for each of your accounts so, for instance, your Amazon account password would be IDon’tLikePasswords!!!AMA.