Fact: Cyber criminals and nation states are having great success in penetrating our cyber defenses. Sadly, we live in a time of global economic pressure and unprecedented geo-political instability. Businesses, especially those involved in international mergers, acquisitions, hostile take-overs and IPOs, are targets, and the threats are significant.
The death of CodeSpaces.com
CodeSpaces.com, as an example, closed their doors on 19 Jun 2014, following a major security breach that began with a denial-of-service (DDoS) attack, and ended 12 hours later with an extortion attempt. CodeSpaces refused to pay and their infrastructure, backups and servers were completely erased and irrecoverable. By not taking the threat seriously, CodeSpaces sealed its own fate.
A $40 billion deal derailed
Another well-publicized “hack” with massive consequences occurred in Canada in 2010. China-based hackers attempted to derail BHP Billiton’s $40 billion acquisition of Potash Corp, the world’s largest potash producer. China, one of the world’s biggest consumers of potash-based fertilizers, was reportedly against the takeover bid by BHP. The Financial Times reported Sinochem Group, China’s state-owned chemical company, even hired several international investment banks to consider ways to disrupt the deal.
Seven major Canadian law firms handling the deal were targeted, as well as the Treasury Board of Canada. Mandiant, a security and vulnerability research company, summarized the magnitude of the hack. Spyware was detected on the law firms’ computers, designed to capture confidential documents. This spyware had arrived via phishing e-mails. When infected email attachments were opened, the “malware” specifically looked for information relating to the Potash Corp deal.
Shortly after, the Canadian Government declared the deal “not in the nation’s best interest.” But the embarrassment and clean up lasted months, and cost those involved a great deal of money, not including the loss of the $40 billion deal.
A costly cleanup for Saudi Aramco
Another startling and shocking attack perpetrated by “Hacktivists” (perhaps backed by nation state resources) was the attack on Saudi Aramco Oil Company in 2012. Hackers calling themselves the Cutting Sword of Justice wiped 30,000 computers inside Saudi Aramco, replacing the boot record with an American flag on fire. The attack on Saudi Aramco, which supplies a tenth of the world’s oil, failed to disrupt production, but was one of the most destructive hacker strikes against a single business. The estimated costs of cleanup was $640 million.
Twitter hack sends shock waves through the market
Twitter has also experienced firsthand the expensive repercussions of a malicious hack. On 23 April, 2013 the Twitter account of the Associated Press tweeted, “Breaking: Two Explosions in the White House and Barack Obama Is Injured.”
The stock market reacted and the Dow Jones dropped 150 points—the equivalent of $136 billion in value—within a matter of minutes. Even though the information was false, and the markets rebounded, the momentary financial loss was staggering. A group calling themselves the Syrian Electronic Army (S.E.A.) claimed credit for the hack, and Twitter quickly introduced two factor authentication to better protect accounts.
Clearly, if hackers can inflict this sort of economic damage to business, considerable attention must be paid to cyber security when contemplating mergers, acquisitions, buy-outs, partnerships and other business transactions. Consider, for example, the economic gains that shadowy investors could make from a cyber threat. People with inside knowledge of Twitter’s breach could have held a short position against key stocks and made a substantial amount of money as a result of the hack. These type of investors may be funding extremely unpleasant activities in far off lands with their ill-gotten gains.