CHINA CITIZENS ACCUSED OF HACKING LAW FIRMS

NEW YORK— Three Chinese citizens have been criminally charged in the United States with trading on confidential corporate information obtained by hacking into networks and servers of law firms working on mergers, US prosecutors said on Tuesday.

Iat Hong of Macau, Bo Zheng of Changsha, and Chin Hung of Macau were charged in an indictment filed in Manhattan federal court with conspiracy, insider trading, wire fraud and computer intrusion.

Prosecutors said the men made over $4 million by placing trades in at least five company stocks based on inside information from unnamed law firms, including about deals involving Intel Corp. and Pitney Bowes Inc.

Civil lawsuit

The men listed themselves in brokerage records as working at information technology companies, the US Securities and Exchange Commission said in a related civil lawsuit.

Hong, 26, was arrested on Sunday in Hong Kong, while Hung, 50, and Zheng, 30, are not in custody, prosecutors said.

The case is the latest US insider trading prosecution to involve hacking, and follows warnings by US officials that law firms could become a prime target for hackers.

“This case of cyber-meets-securities fraud should serve as a wake-up call for law firms around the world: you are and will be targets of cyberhacking, because you have information valuable to would-be criminals,” said US Attorney Preet Bharara in Manhattan.

Prosecutors said that beginning in April 2014, the trio obtained inside information by hacking two US law firms and targeting the e-mail accounts of law firm partners working on mergers and acquisitions.

Prosecutors did not identify the two law firms, or five others they said the defendants targeted.

The indictment said that by using a law firm employee’s credentials, the defendants were able to install malware on the firm’s servers to access emails from lawyers.