SEC sues 'hacker' firm for insider trading
Early access to profits
A firm that allegedly hacked into corporate servers to access news releases early has been sued by US market regulators.
Blue Bottle used the illegal tactic to gain an unfair advantage in market trades that have made it $2.7m in profits, the Securities and Exchange Commission claims. A lawsuit filed by the SEC on Monday alleges Blue Bottle used this illicitly-gained information to guide its trades in securities for 12 US firms including Real Networks and Symantec. Matthew Charles Stokes, 30, the firm's sole owner, and Blue Bottle are named as joint defendants to the lawsuit.
"The defendants did incur losses in some instances where they traded just before news releases," the SEC said in its complaint, Reuters reports. "But the profits are significantly greater than the losses."
Bloomberg adds that Blue Bottle allegedly made $1m by selling Symantec stock short the day before the security firm made a profit warning. The charges against Blue Bottle are largely based on circumstantial evidence. Based on the diverse set of firms Blue Bottle traded in, the timing of the trades and the profit they generated, the SEC alleges the Hong Kong registered accountancy firm must have had access to non-public data. ®