Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Advanced Search Go
Free Newsletter Sign Up

Chinese Hackers Must Pay $8.9 Million for Law Firm Data Theft

May 10, 2017, 9:20 PM

By Bob Van Voris, Bloomberg News

Three Chinese hackers who traded on data they stole from two top New York law firms were ordered by a judge to pay $8.9 million.

U.S. District Judge Valerie Caproni in Manhattan on May 5 fined the men and ordered them to forfeit their profits, plus interest. The hackers, Iat Hong, Bo Zheng and Hung Chin, broke into the email accounts of senior lawyers whose firms were hired to advise on corporate mergers and aquisitions, according to the government.

Caproni ordered a default judgement in favor of the Securities and Exchange Commission because the three men didn’t appear in court to contest the claims. All three also face criminal charges that they made more than $4 million in illegal profits from using the stolen information. Hong was arrested in December in Hong Kong and was facing possible extradition to the U.S.

Included in Caproni’s forfeiture order was more than $900,000 from an account in the name Hong’s mother, which her son used in the illegal scheme, according to the SEC.

Hong, Zheng and Chin profited on deals and speculation involving the drug maker Intermune Inc., chipmaker Intel Corp. and business-services company Pitney Bowes Inc., according to prosecutors.

The law firms weren’t identified in the criminal charges or the SEC case. The Wall Street Journal reported in March that Cravath Swaine & Moore LLP and Weil Gotshal & Manges LLP were among the targeted law firms. Spokeswomen for the firms didn’t return voicemails and emails seeking comment.

The case is Securities and Exchange Commission v. Hong, 16- cv-09947, U.S. District Court, Southern District of New York.

--With assistance from Christian Berthelsen.

For more news, visit Bloomberg .