Logic Bomb

Sometimes IT workers do strange things.

A former systems administrator of UBS PaineWebber was a bit unhappy about his compensation. His bonus came in about $15,000 less than expected. He demanded a contract for the full $175,000, salary and bonus, or he would resign. UBS did not give him the contract so he walked out. That was February. A few weeks later, when the stock markets opened for trading, a logic bomb went off taking out about 1,000 servers and bringing down the UBS network. It cost the company more than $3 million to repair the damage.

Roger Duronio, the former systems adminstrator, is charged with securities fraud, which carries a maximum penalty of 10 years in federal prison and a $1 million fine. He is also charged with Fraud and Related Activity In Connection with Computers. That charge carries a maximum prison sentence of 10 years and a fine of $250,000 or, alternatively, two times the gain made by the defendant or the loss suffered by the victim.

Duronio tried to make some money by buying about $21,000 of put options on UBS after he walked out. A put option generates a profit for the investor if the stock price goes down.

So let’s see. A 63-year old IT manager gets annoyed with a $15,000 gap in a variable bonus payout and walks out. A logic bomb goes off shortly after he leaves. A search warrant of his home finds segments of the malicious code in his personal computers and on hard copy. He buys put options on the company. He is then charged with crimes that, if he is found guilty, could result in fines over $1 million and 10 years in jail.

An interesting retirement plan.

More background here.