Chinese Hackers Charged with Breaching U.S. Law Firms, Trading on Stolen Information
The hackers are alleged to have made over $4 million in illegal profits from the trades.
Manhattan U.S. Attorney Preet Bharara this week announced the arrest of one hacker and the unsealing of a 13-count indictment charging him and two others with hacking into networks and servers at prominent U.S. law firms and trading on information stolen from those firms.
Seven firms were targeted and at least two were successfully breached, according to the indictment.
"As alleged, the defendants -- including Iat Hong, who was arrested in Hong Kong on Christmas Day -- targeted several major New York law firms, specifically looking for inside information about pending mergers and acquisitions," Bharara said in a statement. "They allegedly hacked into two prominent law firms, stole the emails of their M&A partners, and made over $4 million in illegal profits."
Nathan Wenzler, principal security architect at AsTech Consulting, told eSecurity Planet by email that attacks targeting intellectual property and proprietary financial dealings are becoming increasingly popular among hackers.
"Corporations are getting better about protecting this information, making it harder and harder for cyber criminals to gain access and steal this information," Wenzler said. "So they follow the paths of least resistance and aim for organizations which may not be as vigilant."
Law firms are prime targets for these types of attacks, Wenzler said, because they're often smaller organizations with limited IT and cyber security staff. "And, as these recent attacks have shown, many millions of dollars can be made on these billion-dollar deals simply by having the inside track on the private discussions surrounding the M&A," he said.
"It's imperative that firms involved in these kinds of deals take the necessary security precautions to prevent this sort of breach from taking place," Wenzler added. "Despite never storing any individual customer data, the conversations and documentation surrounding a merger or acquisition will continue to be lucrative targets for cyber criminals across the globe."
A recent Deloitte poll of more than 2,500 professionals across a variety of sectors found that 58 percent of respondents expect the number of intellectual property (IP) cyber theft incidents to increase over the next 12 months.
Twelve percent of respondents said their organization had experienced an IP cyber theft incident in the past 12 months, and almost 33 percent said they didn't know if they had.
If their organizations were to suffer a theft of IP, the largest challenges they would face, according to respondents, would include managing investor and customer/client relationships (22.3 percent) and assessing what IP had been stolen, or the impact of IP loss (21.8 percent).
"While many of us know -- or have experienced firsthand -- how a cyber attack can severely disrupt business, loss of an asset as critical as IP can be crippling for most organizations," Don Fancher, principal, Deloitte Financial Advisory Services LLP, said in a statement.
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