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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Caterpillar Inc | NYSE:CAT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-15.40 | -4.40% | 334.40 | 347.77 | 333.12 | 347.41 | 4,199,736 | 01:00:00 |
U.S. authorities on Tuesday brought charges against nine people who were allegedly part of a group of traders who schemed to get early access to corporate news releases and trade on the developments before they were made public.
Those charged by the U.S. attorney's office in New Jersey include Ivan Turchynov and Oleksandr Ieremenko, computer hackers who resided in Ukraine; Arkadiy Dubovoy, a securities trader living in Alpharetta, Ga., and his son Igor Dubovoy.; and Pavel Dubovoy, who resided in Ukraine but was related to Messrs. Dubovoy. Four unnamed co-conspirators were also identified in the indictment.
The charges range from wire fraud to securities fraud to aggravated identity theft. Authorities believe the scheme netted more than $30 million in illicit profits, according to court documents.
Charges are also expected to be filed in Brooklyn, and the Securities and Exchange Commission is seen unveiling related civil charges as early as Tuesday.
The case may be the largest of its kind, people familiar with the matter told The Wall Street Journal before the documents were unsealed and illustrates the increasingly bridged lines between cybertheft and traditional financial crimes.
The charges stem from a complicated cross-agency investigation that involves at least six federal agencies. Top officials from those agencies, including Jeh Johnson, U.S. secretary of homeland security, and SEC Chairman Mary Jo White, are expected to travel to New Jersey to announce the charges, people familiar with the matter said. A news conference is set for 11:30 a.m. EDT.
Starting in February 2010, the hackers allegedly infiltrated the systems of newswire services, such as Business Wire, that publish news releases and obtained information from statements about unannounced news, according to the New Jersey indictment. The traders would then use the information to make early trades on the deals, exploiting the small window of time between news releases being uploaded into the system and the public announcement of the deals.
Among the companies whose shares were affected were Caterpillar Inc., Acme Packet Inc., Edwards Lifesciences Inc. and VeriSign Inc.
In one example from October 2011, the hackers bought more than $5.9 million worth of shares and options based on information from Caterpillar Inc.'s unreleased third-quarter earnings news release.
The charges lay bare an increasingly complex and dangerous black market online. U.S. officials have increasingly warned that criminals are meeting in dark corners of the web to collaborate or barter different criminal skill sets—like hacking or securities fraud—to pull off lucrative schemes.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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