Technology

Chinese hackers must pay $9m over insider trading scam

A gavel Image copyright Science Photo Library
Image caption Regulators said the defendants used stolen information to profit on trades

Three Chinese hackers have been ordered to pay $8.8m (£6.8m) over a multi-million dollar insider trading scam.

The US Securities Exchange Commission (SEC) said Iat Hong, 26, Bo Zheng, 30, and Hung Chin, 50, breached the websites of US law firms and accessed confidential information about mergers and acquisitions.

They then used this information to profit on the stock market.

The men, who have not been extradited, were fined in their absence.

According to the SEC, which charged the men in December, they racked up almost $3m (£2.3m) in illegal profits by hacking two prominent New York law firms.

This involved installing malware to access and download gigabytes of confidential emails, it said.

The trio then bought shares in listed companies ahead of announcements about their merger plans - something that often causes stock to jump.

In a judgement on 5 May, the Southern District of New York said the accused had accepted liability by failing to respond to the allegations.

It said each should pay a the maximum penalty available, as well as returning their ill-gotten gains.

Mr Hong must pay $1.8m, Mr Zheng, $1.9m, and Mr Chin, $4m. Any US assets they own will also be frozen.

Mr Hong's mother, Sou Cheng Lai, has meanwhile been ordered to return more than $900,000 of illicit profits held on behalf of her son.

The men still face a variety of other charges and, if found guilty, could face lengthy prison terms.

The counts against them include conspiracy to commit securities fraud, conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer intrusion, unlawful access, and intentional damage.

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