SAN FRANCISCO: A breach in the back-end of Business Wire's (BW) systems has drawn the company into a Securities and Exchange Commission (SEC) lawsuit that charges an Estonian financial services firm with insider trading.
The SEC complaint alleges that Lohmus Haavel & Viisemann and its employees, Oliver Peek and Kristjan Lepik, "fraudulently stole commercial information from the website of Business Wire ... and since January 2005 have made at least $7.8 million in illegal profits."
According to the complaint, Lohmus became a client of BW to gain access to its secure client website. Once the defendants had access, "they surreptitiously utilized a software program, a so-called spider program, which provided unauthorized access to confidential information contained in impending nonpublic press releases of other Business Wire clients."
Cathy Baron Tamraz, president of BW, said the two did not obtain full press releases, but rather screen shots of limited background information, which would be difficult to read.
"There was a breach in the back end part of our system," she said, adding that BW's proprietary NX distribution platform was not compromised.
Tamraz added that this was the first such incident in the company's 45-year history, and that it has since taken additional security measures.
"We've put in added security and software measures to en-sure this can't happen again,"she said.
The company has received a number of inquiries from concerned clients, and Tamraz said BW has been communicating with them about the incident.
"The response [from clients] has been understanding and supportive," she noted.