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Monday, February 26, 2024 | Back issues
Courthouse News Service Courthouse News Service

Three Accused of Hacking for Stock Manipulation

(CN) - The U.S. government filed charges Tuesday against three men whom it says hacked the personal information of more than 100 million banking customers.

Joshua Aaron, Gery Shalon and Ziv Orenstein are accused of computer hacking, securities fraud, wire fraud, identity theft and a number of conspiracies in the superseding indictment unsealed today.

At a conference discussing the charges this afternoon, Manhattan U.S. Attorney Preet Bharara said this "brave new world of hacking for profit" could signal the "next frontier of securities fraud."

"In short, it is hacking as a business model," he told reporters gathered at his district's office at 1 St. Andrews Plaza.

While the identities of the targets remain anonymous, at least in court papers, illustrations displayed next to Bharara's podium show that hackers breached seven financial institutions, two newspapers, two software development companies and a market-intelligence firm.

The Wall Street Journal reported that its parent company Dow Jones was a victim, along with J.P. Morgan, E-Trade Financial and Scotttrade, in revelations it attributed to anonymous sources.

Shalon, the alleged leader of the scheme, and his accused deputy Orenstein were arrested this past summer in Israel, but the FBI said Aaron was still at large as of July.

Aaron, the third defendant, is a U.S. citizen, authorities say. The trio were all named in July complaint, as well.

Bharara said the trio used the private information they stole "to blast spam emails falsely touting the penny stocks they already dumped."

"So the valuable customer information they stole from their cyberintrusions helped generate for them tens of millions of dollars in stock fraud proceeds," Bharara added.

"In a way, it was securities fraud on cybersteroids."

The 68-page indictment provides more details about what it calls a "sprawling cybercriminal enterprise."

"From approximately 2012 to mid-2015, Gery Shalon, the defendant, orchestrated massive computer hacking crimes against U.S. financial institutions, financial services corporations, and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history," the indictment states.

Prosecutors separately indicted Anthony Murgio on charges of conspiracy, fraud, money laundering and operating an unlicensed money-transmitting business for his alleged role in the illegal Bitcoin exchange, Coin.mx.

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