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Reports US

US stock market daily report (May 19, 2014, Monday)

May 20, 2014, Tuesday, 06:25 GMT | 02:25 EST | 10:55 IST | 13:25 SGT
Contributed by Millennium Traders

Eric Holder, U.S. Attorney Attorney and senior Federal Bureau of Investigation officials, announced an indictment against Chinese military officers for hacking five companies for trade secrets. The victimized companies include: Alcoa Inc. (AA-NYSE), SolarWorld, United States Steel Corp. (X-NYSE), Westinghouse Electric and a union. From SolarWorld, hackers allegedly stole some of the design information for a nuclear power plant, as well as cost and pricing information. This is the first time the U.S. government has publicly accused employees of a foreign power with cybercrimes against American firms. The five individuals allegedly worked for the People’s Liberation Army known as Unit 61398 in Shanghai. According to the indictment, those charged include: Gu Chunhui, Huang Zhenyu, Sun Kailiang, Wang Dong and Wen Xinyu.

Holder said that the victims operate in Pennsylvania where a grand jury returned a 31-count indictment against members of the Chinese military, accusing them of violating federal law by hacking to spy and steal trade secrets. Holder added that in some instances, the hackers stole trade secrets that would have been "particularly beneficial to Chinese companies at the time that they were stolen." In other cases, the hackers are accused of swiping sensitive internal communications that could provide a competitor or a litigation adversary with insight into the strategy and the vulnerabilities of the victimized companies and entities, Holder said.

A statement on China's Foreign Ministry website from spokesman Qin Gang called the charges by the United States "extremely absurd." He said that the United States "has fabricated facts" and that China is a "staunch defender of cyber security." The statement included that the Chinese government, its military and associated personnel never engage in any theft of trade secrets. The indictment "severely violates basic norms of international relations, and harms cooperation and mutual trust between China and the United States," the statement said. Foreign Ministry statement said, and wants it to "correct its mistake" and withdraw the charge.

The following is a list with details, provided by the U.S. Department of Justice, of what Chinese officials allegedly stole from U.S. companies:

2008 - Nearly three weeks after Alcoa Inc. (AA-NYSE) announced a partnership with a Chinese state-owner enterprise, thousands of emails including internal discussions on the transaction were stolen.

2010 - While Toshiba Westinghouse unit was building four power plants in China, negotiating terms of the construction, technical and design specifications for pipes, pipe supports and pipe routing were stolen. DoJ also alleges that sensitive emails belonging to senior decision-makers responsible for Westinghouse’s business relationship were stolen.

2010 - Shortly before the scheduled preliminary determination in a Chinese steel case, malware was installed on U.S. Steel companies. Three days later, hostnames and descriptions of U.S. Steel computers were stolen, which were then used to identify and exploit vulnerable servers.

2012 - Nearly the same time the U.S. Commerce Department found that Chinese solar product manufacturers had “dumped” products into U.S. markets at prices below fair value, thousands of files including information about SolarWorld’s cash flow, manufacturing metrics, production line information, costs and privileged attorney-client communications relating to ongoing trade litigation were stolen.

2012 - Allegheny Technologies Inc. (ATI-NYSE) was engaged in a joint venture and became involved in a trade dispute with a Chinese company. In April 2014, ATI’s network was accessed and network credentials for virtually every employee with the firm, was stolen.

2012 - United Steelworkers was involved in public disputes over Chinese trade practices. Emails from senior employees at Steelworkers which contained sensitive, non-public strategies were stolen.