WEBVTT - Bloomberg Law Brief: Chinese Hackers Trade Stolen Data (Audio)

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<v Speaker 1>Now it's time for our daily Bloomberg Law Brief, exploring

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<v Speaker 1>legal issues in the news. Bloomberg lawhostjud Grasso speaks to

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<v Speaker 1>Bloomberg News reporter Christian Berthelsson about Chinese hackers who allegedly

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<v Speaker 1>made four billion dollars in illicit profits by breaching computers

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<v Speaker 1>of bainter Us law firms. Christian, it's a new twist

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<v Speaker 1>on insider trading where you don't have to actually know

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<v Speaker 1>and talk to an insider. How did they get into

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<v Speaker 1>the systems? Yeah, this is a sort of a new

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<v Speaker 1>twist on the insider trading prosecutions which we've seen a

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<v Speaker 1>lot of since the sort of end of the financial crisis.

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<v Speaker 1>In this case, the hackers seem to have started out

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<v Speaker 1>by stealing the log on information of law firm employees

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<v Speaker 1>at these elite transaction law firms and then using that

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<v Speaker 1>access to then place malware that would allow them continued

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<v Speaker 1>access to the system and to emails of partners that

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<v Speaker 1>we're working on the transaction. And in those emails they're

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<v Speaker 1>getting all the details of these transactions because that's what

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<v Speaker 1>the lawyers are talking about. It's correct, I mean these

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<v Speaker 1>in some cases, these were the partners who were directly

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<v Speaker 1>responsible for handling the legal work on the transactions. The

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<v Speaker 1>information at their disposal was incredibly detailed and of course

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<v Speaker 1>incredibly sensitive and and secret at the time, So it

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<v Speaker 1>gave these hackers a real bird's eye view into these

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<v Speaker 1>transactions and how they were pricing, and what the timing

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<v Speaker 1>was on them and that sort of thing. Um. Ultimately,

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<v Speaker 1>some of the transactions were not consummated, but it's it

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<v Speaker 1>appears from the charging documents that in nearly all cases

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<v Speaker 1>they still wound up making money on them, because you know,

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<v Speaker 1>there would be media reports that talks were in the works,

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<v Speaker 1>or in one case, another buyer swooped in and you know,

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<v Speaker 1>the transaction that was being contemplated didn't happen, but then

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<v Speaker 1>a second buyer came in, uh and took it over,

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<v Speaker 1>and so they still they still wound up making money.

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<v Speaker 1>Manhattan US attorney pre Berrara says the case of cyber

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<v Speaker 1>meat securities fraud should serve as a wake up call

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<v Speaker 1>for law firms around the world. So what will this

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<v Speaker 1>wake up call make them? Do? You know? It's one case.

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<v Speaker 1>I don't know if it's possible to generalize about the

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<v Speaker 1>quality of security practices at law firms sort of across

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<v Speaker 1>the industry, But I think any major law firms are

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<v Speaker 1>probably likely going to take a look at their own

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<v Speaker 1>systems and ensure that they've got sort of best practices

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<v Speaker 1>when it comes to maintaining top security practices. Bloomberg News

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<v Speaker 1>reporter Christian Berthelson speaking to Bloomberg Law host Jun Grosso.

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<v Speaker 1>You can listen to Bloomberg Law weekdays at one pm

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<v Speaker 1>top legal stories from Bloomberg Law, the Securities and a

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<v Speaker 1>Change Commission has lost a battle over its use of

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<v Speaker 1>in house judges. A federal appeals court in Denver found

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<v Speaker 1>that using those judges is unconstitutional. The final say on

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<v Speaker 1>the sec judges may end up at the Supreme Court.

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<v Speaker 1>In Charleston, South Carolina, convicted church shooter Dylan Rufe won't

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<v Speaker 1>call any witnesses or present evidence in the death penalty

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<v Speaker 1>phase of his trial. Rufe is representing himself and was

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<v Speaker 1>found guilty of killing nine black church members in a

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<v Speaker 1>racially motivated attack. And that's this morning's Bloomberg Law Brief.

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