Scam of the day – August 20, 2016 – Guilty plea in insider trading hacking case

I have been reporting to you about developments in this ingenious and massive stock fraud for a year since when 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.  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 civil defendants have already pleaded guilty to charges related to this scam and now Leonid Momotok, a Russian naturalized American citizen pleaded guilty to conspiracy to commit wire fraud in regard to this scam.  According to prosecutors, Momotok made more than 1.2 million dollars in illegal profits by trading Panera Bread Co. and DealerTrackTechnologies based upon the stolen inside information.

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.

TIPS

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.

Scam of the day – January 22, 2016 – Hacker pleads guilty in biggest cyber stock fraud case in history

As I first  reported to you this past August and then twice thereafter, more than thirty people have been  indicted in the largest hacking and securities fraud enterprise in American history.  The defendants are 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.  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 stock traders to make trades based on this inside information before it became known to the public.  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.  In December, Alexander Garkusha, one of the defendants pleaded guilty to making trades based upon the stolen information that personally gained him $125,000. Garkusha is cooperating with the government at this time.  His sentencing is scheduled for May 6th.  Now, another of the defendants, Igor Dubovoy has pleaded guilty to conspiracy to commit wire fraud and has agreed to forfeit more than 11 million dollars.

TIPS

One of the biggest takeaways from this case is how easy it is to still use 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 train their employees to recognize phishing emails nor have they learned to encrypt and segregate sensitive data from hackers.  This lesson is one that each of us as individuals should also learn in our own lives because identity thieves and hackers use the same phishing technique to steal the identities of individual victims.  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.

Scam of the day – December 25, 2015 – Stock trader pleads guilty in hacking scheme

As I reported to you this past August, five Americans and four Ukrainians were indicted in the largest hacking and securities fraud enterprise in American history.  The nine defendants are made up of rogue stock traders including hedge fund manager and former Morgan Stanley employee Vitaly Korchevsky along with four computer hackers based in the Ukraine.  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 stock traders to make trades based on this inside information before it became known to the public.  It is estimated that between 2010 and 2015, the defendants made profits of 100 million dollars on 800 trades during this time.  A few days ago Alexander Garkusha pleaded guilty to making trades based upon the stolen information that personally gained him $125,000. Garkusha is cooperating with the government at this time.  His sentencing is scheduled for May 6th.

TIPS

One of the biggest takeaways from this case is how easy it is to still use 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 train their employees to recognize phishing emails nor have they learned to encrypt and segregate sensitive data from hackers.  This lesson is one that each of us as individuals should also learn in our own lives because identity thieves and hackers use the same phishing technique to steal the identities of individual victims.  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.

Scam of the day – September 20, 2015 – Stock trading hackers and SEC settle charges

In mid August I told you about the SEC civil action against thirty-two people charged in the largest hacking and securities fraud enterprise in American history.  The group of defendants is 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.  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 stock traders to make trades based on this inside information before it became known to the public.  It is estimated that between 2010 and 2015, the defendants made profits of 100 million dollars on 800 trades during this time.

Now, the SEC has settled the claims against two of the defendants, Jaspen Capital Partners Limited a Ukrainian company and its CEO Andrly Supranonok who, the SEC alleged made 25 million dollars in illegal profits from this enterprise.  It is interesting to note, however, that not only did the SEC determine to prosecute this case civilly rather than criminally, but in its settlement, the SEC were not required to admit responsibility.  In effect, what the defendants did is deny that they did anything wrong and promise not to do it again.  They also, however paid a fine of 30 million dollars, which is 5 million dollars more than they earned through their improper actions.

TIPS

The topic of when the SEC and the Justice Department prosecute white collar crimes as civil violations and when as criminal violations is a major topic of discussion with many people believing that white collar crime is not prosecuted criminal enough to serve as a disincentive to would-be white collar criminals.

However, for all of us as individuals, one of the biggest takeaways from this case is how easy it is to still use 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 train their employees to recognize phishing emails nor have they learned to encrypt and segregate sensitive data from hackers.  This lesson is one that each of us as individuals should also learn in our own lives because identity thieves and hackers use the same phishing technique to steal the identities of individual victims.  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.

Scam of the day – August 13, 2015 – Nine charged with hacking and securities fraud

Earlier this week, five Americans and four Ukrainians were indicted in the largest hacking and securities fraud enterprise in American history.  The nine defendants are made up of rogue stock traders including hedge fund manager and former Morgan Stanley employee Vitaly Korchevsky along with four computer hackers based in the Ukraine.  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 stock traders to make trades based on this inside information before it became known to the public.  It is estimated that between 2010 and 2015, the defendants made profits of 100 million dollars on 800 trades during this time.

TIPS

One of the biggest takeaways from this case is how easy it is to still use 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 train their employees to recognize phishing emails nor have they learned to encrypt and segregate sensitive data from hackers.  This lesson is one that each of us as individuals should also learn in our own lives because identity thieves and hackers use the same phishing technique to steal the identities of individual victims.  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.