FBI: Hedge Fund Traders Share Insider Information in the Call of Duty Game Chat

At the end of January 2016, the FBI special agent David Chaves made a speech at a round table on the work of hedge funds. According to the publication Business Insider, the representative of the special services said that popular games like Call of Duty are used by fund traders to disclose insider information.

More than a game

Since the post-crisis 2009, the US government has made a lot of efforts to combat insider trading, carried out by employees of hedge funds. During this time, dozens of arrests have been made and many sentences have been handed down to hedge fund managers and simple traders.
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During his speech, the FBI representative spoke about the methods that analysts and traders use to exchange non-public, non-public information. The audience was already familiar with some of them: for example, disposable phones (cheap prepaid cell phones), which can be bought from Walmart and Kmart. Others were a novelty for the special services themselves: encrypted messages on social networks, announcing the start of trading.

But the most creative exchange method was to use the chat rooms of popular video games.

"This is amazing. All you need is a PlayStation or Xbox with Internet access. You are playing Call of Duty with a partner and are ready to be in a private bunker at any time in order to communicate and hand over private information about the bidding to him, ”explained David Chaves.

Chaves noted the convenience of communication in the process of online games - Call of Duty and other games on popular platforms PlayStation Network (PSN) and Xbox Live allow gamers to communicate in voice chats. In addition, in the same Call of Duty there is the possibility of creating temporary self-destructing messages. The difficulty of intercepting information when organizing such communication sessions makes it difficult for special services to search for insiders who are “merging” financial data.

Other ways to steal information

Not only video games and encrypted chat rooms are used to spread insider information. Earlier in 2015, the FBI announced that the financial services of the company Dow Jones & Co. a hacker attack was carried out, as a result of which the attackers managed to steal sensitive information. As the representatives of the special services stated then, the stolen data could be of interest to the bidders - having access to the information prior to its publication, they would have an advantage over other market participants.



In addition, in August 2015, the US authorities carried out arrests of Russian-speaking hackers who hacked into the PRNewswire, Marketwired and Businesswire news terminal systems in order to obtain insider information for trading on the stock exchange. Allegedly, the criminal group for several years of its existence was able to earn in this way more than $ 100 million dollars.

To counter the insiders, the special services have to use original methods of investigation. For example, one of the largest cases of insider trading was solved by compiling graphs illustrating the connections of individuals and financial organizations involved in criminal activities.



In addition, to identify illegal transactions made by insiders, special algorithms are used that analyze the patterns of behavior of players in the market.

At the same time, often traders do not even need to possess insider information in order to gain an advantage in trading. Sometimes it is enough to “simulate” important news in such a way that other traders believe in them. For example, not so long ago, we wrote that a financier from Scotland was charged with fraud - a man created two fake Twitter accounts disguised as real accounts of research and analytical financial companies. Then in these accounts he posted information about the situation in companies whose shares are traded on the stock exchange, which caused fluctuations in the value of such securities.