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[ISN] Computer Programmer Faces U.S. Fraud Charge in Virus Attack
Forwarded from: "eric wolbrom, CISSP" <eric@xxxxxxxxxx>
December 18, 2002
By ROBERT HANLEY
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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