Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring
Speaker 1: legal issues in the news. Bloomberg lawhostjud Grasso speaks to
Speaker 1: Bloomberg News reporter Christian Berthelsson about Chinese hackers who allegedly
Speaker 1: made four billion dollars in illicit profits by breaching computers
Speaker 1: of bainter Us law firms. Christian, it's a new twist
Speaker 1: on insider trading where you don't have to actually know
Speaker 1: and talk to an insider. How did they get into
Speaker 1: the systems? Yeah, this is a sort of a new
Speaker 1: twist on the insider trading prosecutions which we've seen a
Speaker 1: lot of since the sort of end of the financial crisis.
Speaker 1: In this case, the hackers seem to have started out
Speaker 1: by stealing the log on information of law firm employees
Speaker 1: at these elite transaction law firms and then using that
Speaker 1: access to then place malware that would allow them continued
Speaker 1: access to the system and to emails of partners that
Speaker 1: we're working on the transaction. And in those emails they're
Speaker 1: getting all the details of these transactions because that's what
Speaker 1: the lawyers are talking about. It's correct, I mean these
Speaker 1: in some cases, these were the partners who were directly
Speaker 1: responsible for handling the legal work on the transactions. The
Speaker 1: information at their disposal was incredibly detailed and of course
Speaker 1: incredibly sensitive and and secret at the time, So it
Speaker 1: gave these hackers a real bird's eye view into these
Speaker 1: transactions and how they were pricing, and what the timing
Speaker 1: was on them and that sort of thing. Um. Ultimately,
Speaker 1: some of the transactions were not consummated, but it's it
Speaker 1: appears from the charging documents that in nearly all cases
Speaker 1: they still wound up making money on them, because you know,
Speaker 1: there would be media reports that talks were in the works,
Speaker 1: or in one case, another buyer swooped in and you know,
Speaker 1: the transaction that was being contemplated didn't happen, but then
Speaker 1: a second buyer came in, uh and took it over,
Speaker 1: and so they still they still wound up making money.
Speaker 1: Manhattan US attorney pre Berrara says the case of cyber
Speaker 1: meat securities fraud should serve as a wake up call
Speaker 1: for law firms around the world. So what will this
Speaker 1: wake up call make them? Do? You know? It's one case.
Speaker 1: I don't know if it's possible to generalize about the
Speaker 1: quality of security practices at law firms sort of across
Speaker 1: the industry, But I think any major law firms are
Speaker 1: probably likely going to take a look at their own
Speaker 1: systems and ensure that they've got sort of best practices
Speaker 1: when it comes to maintaining top security practices. Bloomberg News
Speaker 1: reporter Christian Berthelson speaking to Bloomberg Law host Jun Grosso.
Speaker 1: You can listen to Bloomberg Law weekdays at one pm
Speaker 1: most free time here on Bloomberg Radio Now. Among the
Speaker 1: top legal stories from Bloomberg Law, the Securities and a
Speaker 1: Change Commission has lost a battle over its use of
Speaker 1: in house judges. A federal appeals court in Denver found
Speaker 1: that using those judges is unconstitutional. The final say on
Speaker 1: the sec judges may end up at the Supreme Court.
Speaker 1: In Charleston, South Carolina, convicted church shooter Dylan Rufe won't
Speaker 1: call any witnesses or present evidence in the death penalty
Speaker 1: phase of his trial. Rufe is representing himself and was
Speaker 1: found guilty of killing nine black church members in a
Speaker 1: racially motivated attack. And that's this morning's Bloomberg Law Brief.
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