# Protecting Against the Threat of Insider Trading Cyber Attacks
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-01-05
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Insider Trading Threats: The Rise of Cyber Crime
Meta Description: Stay informed about the rise of cyber-criminals profiting from insider information breaches, affecting financial markets and organisations worldwide.
URL: https://financedigest.com/protecting-against-the-threat-of-insider-trading-cyber-attackshtml

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**Alexander Beattie,** Enterprise Director UK & Ireland, Anomali

The massive data breach at Equifax, in which the personal information of 145 million consumers is thought to have been exposed to cyber criminals, has once again focused media attention on the issue of insider trading. It is [alleged](https://www.cnbc.com/2017/10/04/cramer-3-equifax-executives-must-be-investigated-for-insider-trading.html) that three Equifax executives profited by off-loading $2million worth of the company’s stock at favourable prices.They did this just days before the breach was made public, knowing the news would bring the share price crashing down as soon as it broke.

Perhaps the most audacious example of this came to light this September when the US Securities and Exchange Commission (SEC), the country’s top financial regulator, [revealed](https://www.nytimes.com/2017/09/20/business/sec-hacking-attack.html) that it was itself the victim of a data breach. The hackers, in this case, are thought to have attempted to steal insider information about listed companies filed on the SEC’s computer systems that could be used to make illicit gains in the [share market](https://www.financedigest.com/countertop-spray-market-share-by-2028-upcoming-trends-and-analysis.html "Countertop Spray Market Share by 2028: Upcoming Trends and Analysis").

Also in December 2016, Chinese cyber-criminals were [charged](http://www.bbc.co.uk/news/technology-39883224) with breaching the websites of a number of US law firms in order to get hold of confidential information about mergers and acquisitions which allowed them to make nearly $3mthrough insider trading.

Evidently, [threats of this kind are on the rise](https://www.financedigest.com/how-are-rising-cyber-threats-boosting-demand-for-public-safety-software.html "How are Rising Cyber Threats Boosting Demand for Public Safety Software"). And worryingly, as well as banks, traders, regulatory bodies that are directly linked to the markets, listed companies and the lawyers, financial consultancies and other organisations that work with them are all at [risk of this kind of threat](https://www.financedigest.com/using-threat-intelligence-to-minimise-cyber-insurance-risks.html "Using Threat Intelligence to Minimise Cyber Insurance Risks").

The range of information that constitutes valuable insider trading insights is extremely broad. As well as yet-to-be-released details of company results or [mergers and acquisitions](https://www.financedigest.com/how-to-handle-cyber-security-during-mergers-and-acquisitions.html "How to Handle Cyber Security during Mergers and Acquisitions"), insider trading can include prior knowledge of any news or events that might drive the value of securities or bonds upon down – such as a company’s new capability or manufacturing process, or even the details of its new marketing strategy.

The attacks are well planned, designed to earn millions and often orchestrated by gangs many thousands of miles away, such as inEastern [Europe or Asia](https://www.financedigest.com/us-treasurys-top-international-official-heads-to-europe-asia-for-talks-on-economy.html "US Treasury’s top international official heads to Europe, Asia for talks on economy"). There is even [evidence of exclusive online forums](http://www.securityweek.com/opsec-underground-look-insider-trading) on the dark web providing a black market for cyber-criminals to buy and sell insider information and hacking secrets.

Unlike the recent high profile [ransomware attacks](https://www.financedigest.com/biden-orders-probe-of-latest-ransomware-attack.html "Biden orders probe of latest ransomware attack"), the victims of insider trading breaches are never meant to find out that their computers have been compromised. Once they manage to hack into an organization, the perpetrators’ objective is to remain under the radar, maintaining the compromise for as long as possible in order to continue making illegal gains.

In the case of the breach of the financial newswires mentioned above, the attack is believed to have provided hackers with insider trading information for a [period of around](https://www.financedigest.com/industrial-flooring-market-is-anticipated-to-expand-at-a-cagr-of-over-4-during-the-forecast-period-of-2020-2030-to-be-valued-around-us-12-4-bn-by-2030.html "Industrial Flooring Market is anticipated to expand at a CAGR of over 4% during the forecast period of 2020-2030, to be valued around US$ 12.4 Bn by 2030") three years.

The culprits in these attacks rely on a variety of methods usually involving social engineering schemes aimed at conning or baitingemployeesinto giving up passwords or login informationor misleading them into installing malware onto corporate networks.The malware allows [hackers to get inside the network](https://www.financedigest.com/hackers-hit-italian-oil-company-enis-computer-networks.html "Hackers hit Italian oil company Eni’s computer networks") and discretely pass information outside without anyone’s knowledge.

The Chinese hackers that compromised theUS law firms’ computers used malware that allowed them to access and download many gigabytes of confidential emails.

Another tactic is to cultivate and reward employees for acting as‘malicious insiders.’These employees are persuaded to knowingly plant malware onto their employers’ networks. Some of the underground dark web forums that are frequented by hackers [are believed to be](https://www.pcworld.com/article/3164415/security/hackers-are-seeking-out-company-insiders-on-the-black-market.html) channels for recruiting employees to this type scheme.

Withcyber-criminals getting smarter and more organised, [protecting against such threats](https://www.financedigest.com/the-best-ways-to-protect-your-business-from-cyber-threats-in-2021.html "The best ways to protect your business from cyber threats in 2021") becomes more challenging. Beyond the basic firewalls and security software and policies, what should at-risk organisations be looking to do?

One of the biggest priorities is to find ways of identifying suspicious or malicious activity before it ever reaches the network. This is where threat intelligence [platforms](https://www.financedigest.com/vodafone-leverages-gumgums-contextual-intelligence-platform-to-increase-purchase-intent-around-samsung-galaxy-z-flip3.html "Vodafone leverages GumGum’s contextual intelligence platform to increase purchase intent around Samsung Galaxy Z Flip3") and intelligence sharing come in.

[Threat intelligence platforms](https://en.wikipedia.org/wiki/Threat_Intelligence_Platform) are used to continuously gather and analyse raw data feeds about existing or emerging threats and threat actors, their patterns of activity and the vulnerabilities they are exploiting.They filter these data streams, which come from a variety of sources, to produce useable [information that can be integrated into a company’s IT security systems](https://www.financedigest.com/the-cardiovascular-information-systems-market-is-expected-to-grow-on-a-persistent-note-in-the-future.html "The Cardiovascular Information Systems Market is expected to grow on a persistent note in the future"). This helps organisations identify, understand and [protect against current live](https://www.financedigest.com/british-pm-rishi-sunak-pledges-further-action-on-strikes-to-protect-lives.html "British PM Rishi Sunak pledges further action on strikes to ‘protect lives’") risks and threats, especially those most likely to affect their own particular environment.

Moreover, organisations should be [sharing information such as learnings and insights](https://www.financedigest.com/acetate-salt-market-size-trends-share-insights-report-2026.html "Acetate Salt Market Size, Trends, Share, Insights Report 2026") about the threats they are facing with others who might be in a similar position.Within trusted circles such as [Information Sharing and Analysis](https://www.financedigest.com/golf-apparel-market-key-players-and-production-information-analysis-with-forecast-2031.html "Golf Apparel Market: Key Players and Production Information Analysis with Forecast 2031") Centers (ISACs), they can increase their knowledge of likely threats and- by pooling their information – identify new threats and vulnerabilities that might never have come to light had they been working alone.

In the UK the Financial Conduct Authority (FCA) is an advocate of threat intelligence sharing, having established a number of Cyber Coordination [Groups to achieve a better collective cyber capability with the country’s](https://www.financedigest.com/imf-should-issue-new-reserves-to-help-countries-tackle-overlapping-crises-groups.html "IMF should issue new reserves to help countries tackle overlapping crises – groups") financial community. Similarly in the Middle East the UAE Banks Federation (UBF) have come together to form an Information [Sharing and Analysis](https://www.financedigest.com/anti-microbial-nanocoatings-market-global-industry-analysis-size-share-growth-trends-and-forecast-2025.html "Anti-Microbial Nanocoatings Market Global Industry Analysis, Size, Share, Growth, Trends And Forecast 2025") Center (ISAC) to better identify, protect, detect and respond to cyber-attacks.

Another [important defensive measure is changing](https://www.financedigest.com/plaque-disclosing-aids-market-important-changes-in-industry-dynamics-during-2022-2028.html "Plaque Disclosing Aids Market Important Changes in Industry Dynamics during 2022-2028") the underlying culture and attitudes towards IT security among staff. This is an issue that Nausicaa Delfas, Executive Director of the FCA, [raised](https://www.fca.org.uk/news/speeches/expect-unexpected-cyber-security-2017-beyond) in a conference speech earlier this year.She stressed that a [“secure culture”](https://www.financedigest.com/a-culture-of-cyber-security-throughout-financial-services-organisations.html "A Culture of Cyber Security Throughout Financial Services Organisations") goes beyond creating rules and policies which can be easily ignored by employees.

Instead Delfassuggests borrowing from behavioural change models that rely on the idea that the “individual will take action if the perceived benefit outweighs the cost of taking action”.So, for instance, as well as education programmes designed to give employees a sound understanding of cyber-security threats and the [warning signs](https://www.financedigest.com/why-training-your-staff-is-key-in-spotting-the-warning-signs-of-a-cybersecurity-breach.html "Why training your staff is key in spotting the warning signs of a cybersecurity breach") to look out for, organisations could introduce fake phishing scams. Staff who avoid or call out these dummy attacks could be rewarded, while further action could be taken on those who persistently fail to identify them.

However, the breach of the SEC’s systems suggests that even the most mature andsecurity minded of organisations can still be vulnerable to this kind of attack. No at-risk organisation should ever become complacent. Therefore, in order to properly defend yourself, implementing a range of measures, like those mentioned above, is key in helping to counteract the threat.


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