Benefits December 14, 2006

"Logic Bomb" Scheme Fizzles on Ex-UBS Worker

December 14, 2006 (PLANSPONSOR.com) - A former UBS PaineWebber employee's attempt to profit from falling company stock prices after he planted a computer "logic bomb" on the company's network blew up in his face when the stock price remained stable.
Reported by

A federal judge in New Jersey sentenced Roger Duronio, 64, to 97 months in prison and ordered him to make $3.1 million in restitution to his former employer, the US attorney’s office said in a statement, according to a Reuters news report.

The news report said Duronio quit his job as a systems administrator in February 2002 after repeatedly expressing dissatisfaction about his salary and bonuses. He then planted malicious computer code known as a “logic bomb” in about 1,000 of PaineWebber’s approximately 1,500 networked computers in branch offices. On March 4, 2002, the “bomb” detonated and began deleting files, according to Reuters. Duronio thought the resulting chaos would send UBS AG stock plummeting, and bought $23,000 worth of puts on the stock.

However, Duronio apparently did not account for the possibility that his “logic bomb” computer attack would not dislodge the UBS stock price. It remained stable during the period.

Duronio was convicted on July 19 of one count of securities fraud and one count of computer fraud in the 2002 case.

«