At a Kiev nightclub in the spring of 2012, 24-year-old Ivan Turchynov made a fateful drunken boast to some fellow hackers. For years, Turchynov said, he’d been hacking unpublished press releases from business newswires and selling them, via Moscow-based middlemen, to stock traders for a cut of the sizable profits.
Oleksandr Ieremenko, one of the hackers at the club that night, had worked with Turchynov before and decided he wanted in on the scam. With his friend Vadym Iermolovych, he hacked Business Wire, stole Turchynov’s inside access to the site, and pushed the main Moscovite ringleader, known by the screen name eggPLC, to bring them in on the scheme. The hostile takeover meant Turchynov was forced to split his business. Now, there were three hackers in on the game.
Newswires like Business Wire are clearinghouses for corporate information, holding press releases, regulatory announcements, and other market-moving information under strict embargo before sending it out to the world. Over a period of at least five years, three US newswires were hacked using a variety of methods from SQL injections and phishing emails to data-stealing malware and illicitly acquired login credentials. Traders who were active on US stock exchanges drew up shopping lists of company press releases and told the hackers when to expect them to hit the newswires. The hackers would then upload the stolen press releases to foreign servers for the traders to access in exchange for 40 percent of their profits, paid to various offshore bank accounts. Through interviews with sources involved with both the scheme and the investigation, chat logs, and court documents, The Verge has traced the evolution of what law enforcement would later call one of the largest securities fraud cases in US history.