February 26, 2007 / 7:35 PM / 11 years ago

SEC sues firm for hacking company news releases

NEW YORK (Reuters) - U.S. regulators sued an overseas company and its owner on Monday, alleging they hacked into computer systems to get corporate news releases early and traded on that information, making a profit of $2.7 million.

The Securities and Exchange Commission, in the lawsuit, accused Blue Bottle Ltd. of using the information it received to trade in securities of at least 12 U.S. companies, including AllianceBernstein Holding LP and Symantec Corp..

“The defendants did incur losses in some instances where they traded just before news releases,” the SEC said in the complaint, filed in U.S. District Court in Manhattan. “But the profits are significantly greater than the losses.”

The company starting making the profit last month, the complaint said.

Matthew Charles Stokes, 30, is the sole owner and chief executive of Blue Bottle, according to the complaint.

A phone number for the company was not immediately available, and it was unclear where it is based. The SEC complaint cited documents that Blue Bottle used to open an account with an online broker as identifying the company’s address in London.

But the regulator said the address was occupied by a firm of accountants and an insolvency practitioner. The documents that Blue Bottle used to open the brokerage account also described the company’s business as accounting services and tax consultation, according to the complaint.

The SEC was not immediately available to comment.

The lawsuit says Blue Bottle also traded in securities of companies including Achillion Pharmaceuticals Inc., Allscripts Healthcare Solutions Inc., BJ’s Wholesale Club Inc., Brady Corp., CACI International Inc., Hornbeck Offshore Services Inc., LeCroy Corp., Millipore Corp., Odyssey Healthcare Inc. and RealNetworks Inc..

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