[ISN] Computer Programmer Faces U.S. Fraud Charge in Virus Attack

From: InfoSec News (isnat_private)
Date: Thu Dec 19 2002 - 00:55:16 PST

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    Forwarded from: "eric wolbrom, CISSP" <ericat_private>
    December 18, 2002
    NEWARK, Dec. 17 - A former computer expert with UBS PaineWebber was
    indicted today on federal charges of trying to manipulate the stock
    price of the brokerage's parent company by sabotaging its computer
    system last spring, the authorities said.
    The United States attorney for New Jersey, Christopher J. Christie,
    said the suspect, Roger Duronio, 60, of Bogota, N.J., hoped to cash in
    on a resulting drop in the stock value of the parent company, UBS.
    The indictment said Mr. Duronio spent nearly $22,000 in February and
    March buying a type of security known as a put option contract, which
    increases in value as a company's stock price declines. Mr. Christie
    said the plan failed when a computer virus that Mr. Duronio personally
    transmitted to 1,000 of the 1,500 computers used by PaineWebber
    brokers across the country failed to disrupt work seriously or cause a
    sharp change in the stock price.
    Mr. Duronio's lawyer, Justin P. Walder, said his client would plead
    not guilty. "Mr. Duronio clearly is innocent and intends to contest
    these allegations," Mr. Walder said. "Their analysis of Mr. Duronio's
    stock trading is out of context. It was not directed to perpetuate any
    securities fraud at any time."
    Mr. Duronio was released today on $1 million bond after an appearance
    in United States District Court here. He was charged with one count of
    securities fraud and one count of computer fraud. The charges carry
    maximum penalties of 20 years in prison and $7 million in fines.
    Mr. Duronio earned $175,000 as a computer systems administrator in
    PaineWebber's office in Weehawken, law enforcement officials said, but
    the indictment said he thought he should be paid more. Before leaving
    the company on Feb. 22, he designed and transmitted the disruptive
    virus, the indictment charges.
    It was intended to prevent brokers from placing clients' orders at
    9:30 a.m. - the start of daily stock trading - every Monday in March,
    April and May, the indictment said. It caused problems briefly only on
    the first Monday, March 4, Mr. Christie said.
    A spokesman for PaineWebber, Paul Marrone, said today that back-up
    computer programs had started operating immediately and that the
    company was able to place all clients' orders. Mr. Marrone said
    PaineWebber spent $3 million restoring disrupted systems and hiring
    investigators to trace the virus.
    The price of UBS's stock closed on March 4 at $48.20, up from a close
    of $46.69 on the previous Friday. The company's stock has traded
    between a high of $51.99 in June and a low of $34.54 in October and
    closed today at $49.82.
    eric wolbrom, CISSP                     Safe Harbor Technologies
    President & CIO                         190 Goldens Bridge Ct.
    Voice 914.767.9090 ext. 6000            Katonah, NY 10536
    Fax   914.767.3911                              http://www.shtech.net
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