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