An Australian IT consultant has been sentenced to three years in prison for hacking into a financial publisher and using the stolen information to engage in insider trading.
Steven Oakes, from Sydney, pleaded guilty to 11 offences of insider trading, unauthorised access to data with the intention to commit a serious offence and the alteration of electronic devices.
According to the Australian Securities and Investments Commission (ASIC), Oakes used hacking software to “intercept and decrypt Wi-Fi data to obtain the network login credentials” of Melbourne-based financial publisher Port Philip Publishing (PPP).
The 42-year-old used these credentials to gain access to reports that made recommendations on which ASX listed companies to buy shares in. Using this insider information, Oakes bought shares on 70 occasions in 52 different companies before the reports were published.
He then sold them on at a profit after values of the shares went up following the release of the reports.
The offences took place between January 2012 and February 2016.
During sentencing, Her Honour Judge Fox said Oakes was “motivated by greed” and that “if you access a secure computer network to commit a crime, you should expect to go to jail”.
Commenting on the sentence, Matt Lock, director of sales engineers at Varonis, said:
“It’s alarming that the perpetrator is reported to have stayed on the network for four full years. Cybercriminals are notorious for moving low and slow on a network to avoid detection, and this is a classic example.
“Instead of robbing a bank, criminals know they can boost their own ill-gotten profits by stealing sensitive insider information. Financial organisations must stay on guard for disgruntled insiders and criminals that disguise themselves as legitimate users.”
Insider trading hacker: An old problem in the digital age
Sentenced yesterday at the County court in Melbourne, Oakes will be eligible for release after 18 months in recognisance of good behaviour.
Joseph Carson, chief security scientist & advisory CISO at Thycotic, said that the insider trader hack reflects an old problem evolving with the digital era.
“For the cybercriminal, the goal is not to install malicious malware or disruptive ransomware forcing the company to pay-out, in fact, these cybercriminals do not even steal the data or threaten to disclose it.
“In common with nation-state actors, cybercriminals do not want to be detected, and so employ the same techniques – their goal is financial gain, and to do this they need to remain hidden from their unsuspecting victims.”
ASIC Commissioner Cathie Armour said:
“Technology-enabled offending, including cyber-related market misconduct, has been a priority for ASIC’s Enforcement teams. Despite the sophistication of cybercriminals, ASIC can identify and investigate suspicious market activity connected to computer hacking activities, as it did in the case against Mr Oakes. Traders should be aware that ASIC continues to focus on cyber-related offending.”