PaineWebber Ex-Employee Charged with Fraud
Tue December 17, 2002 03:35 PM ET
NEW YORK (Reuters) - Federal prosecutors on Tuesday charged a disgruntled former employee of UBS PaineWebber with fraud and accused him of trying to sabotage the brokerage's computer network with an electronic "logic bomb."
The U.S. Department of Justice's New Jersey district charged Roger Duronio, 60, of planting the logic bomb in about 1,000 of PaineWebber's 1,500 networked computers.
So-called logic bombs are pieces of software code buried within another program and are designed to disrupt computer systems. They are often delivered by e-mail.
Duronio, a computer systems administrator, resigned from PaineWebber on Feb. 22 after complaining about his salary and bonuses. The logic bomb he allegedly constructed from November 2001 until February of this year was activated on March 4, U.S. Attorney Christopher Christie said in a statement.
Duronio, who was scheduled to appear in New Jersey court on Tuesday afternoon, could not immediately be reached for comment.
Prosecutors charge Duronio attempted to profit from planting the logic bomb by betting that the stock of UBS AG UBSZn.VX UBS.N , PaineWebber's parent company, would fall.
He allegedly bought more than $21,000 of put options, which grants an investor the right to sell a certain amount of underlying stock at a certain price. By giving the investor the right to sell underlying stock at a given price, put options increase in value when the stock value falls.
Duronio is being charged with securities fraud and one count of computer related fraud. The charges carry combined maximum sentences of 20 years in prison and fines of more than $1.25 million.
Duronio's logic bomb, the government charged, deleted files and led to $3 million in costs for PaineWebber to assess and repair the damage.