SEC Takes Proactive Measures In The Hunt For Hackers

In a first, the SEC has proactively approached several businesses to investigate failures in cybersecurity that may have created a new method of insider trading. The Commission’s investigation, along with a probe by the Secret Service, is focused on a group they’re calling FIN4 which they suspect to have broken into corporate email accounts to steal confidential information about mergers and acquisitions. Naturally, the SEC declined to comment exactly how broad their investigation is, or really anything else on the matter.

The investigation was spurred by a December investigation on FIN4 by security company FireEye that stated the hacking group’s primary intent is on, “compromising the accounts of individuals who possess non-public information about merger and acquisition (M&A) deals and major market-moving announcements, particularly in the healthcare and pharmaceutical industries.” FireEye also noted that the hacking group focuses on those industries due to the volatile nature of their stocks. 

FIN4’s attacks on these companies are brilliant in their simplicity. 

1) Identify insecure email accounts.

2) Create fake MS Outlook login pages.

3) Get somewhat computer illiterate executives, attorneys, and consultants to enter login info.

4) Profit.

So far, the SEC has asked at least eight companies to provide information on their data breaches making this the first time it’s ever approached companies about breaches in connection with an insider trading probe. Although companies are not required to disclose breaches unless they’re deemed ‘material’ under federal securities law, it appears the SEC has taken an active stance on cybersecurity despite only bringing a handful of civil cases against hackers in the past. What will that lead to after they’ve concluded their investigation? More regulations imposed on already regulation-laden industries? Or, a wakeup call to those within those industries that ‘password1234’ is not going to cut it when others are actively trying to steal their information?

[original]

EquityNet

Comments

[p00k1e]

Hackers?  Make people use Google Chrome to trade. 

"

Google eavesdropping tool installed on computers without permission

Privacy advocates claim always-listening component was involuntarily activated within Chromium, potentially exposing private conversations

"

[Bob]

http://www.theinquirer.net/inquirer/news/2339043/second-eavesdropping-bu...

[litemine]

Everything is legal in this Great Republic that it Isn't.

[Undutchable73]

oh no..so many breaches lately..

them naughty hackers..probably from China! no, wait..maybe Russia!

[pupdog1]

Sounds like the hackers should try to look like the guys who are rigging global interest rates.

They'll never be noticed that way.

[ebworthen]

S.E.C. combined with "proactive" and "measures" and "hunt" = ROFLMAO!

The only thing those fuckers are proactive at is punishing ratings agencies and finding porn to jack off to.

Sure, they'll be right on it, with their "top men", just as soon as they find the Ark of the Covenant and the Holy Grail.

[KnuckleDragger-X]

Don't worry, they'll be on the case as soon as they finish fapping to their latest porn download.......

[DeadFred]

Come down hard on these guys, the NSA doesn't tolerate competition. They have all the inside infornation, all of it. Do you think they are too honest to misuse it? Really?

[Paveway IV]

Insider trading? Sit down and grab a beer, sonny... I got a tale for you.

Most of this is thanks to the work of James Bramford. George Washington has several guest posts regarding this. I've taken (perhaps too liberally) several quotes from Christopher Ketchum's article on Alternet (here on Counterpunch)

Israel has pretty much had unfettered access to domestic phone and internet switches for years. It all started with CALEA, enthusiastically supported by treasonous Israeli-firster dual-citizen congressmen. CALEA had nothing to do with Israel. Why the dual-citizen congressional interest?

The key to the kingdom was the 1994 Communications Assistance for Law Enforcement Act (CALEA), which was Congress’ solution for wiretapping in the digital age.   Gone are the days when wiretaps were conducted through on-site tinkering with copper switches.  CALEA mandated that telephonic surveillance operate through computers linked directly into the routers and hubs of telecom companies — a spyware apparatus matched in real-time, all the time, to American telephones and modems.

Oh... Lazy feds and automated tapping. The Israelis (and apparently nobody else) were all over that. They already ran the largest telephone logging/billing system used in the U.S.: Comverse. Nothing wrong with that. I mean, what kind of inside information could you possiby get from phone records? I guess unless there was a merger in the works... Or you wanted to know who the SEC was investigating... But I digress:

AT&T and Verizon, which together manage as much as 90 percent of the nation’s communications traffic, contracted with Israeli firms in order to comply with CALEA.  AT&T employed the services of Narus Inc., which was founded in Israel in 1997.

Telecoms contracting with Israeli firms for automated phone tapping. Which was bad enough, but Narus insisted that only their people could operate the snooping boxes in the U.S., thus their techs had unlimited administrator access to all snooping gear and could (and apparently did) run their own taps unbeknownst to AT&T. They arguable had easier access to real-time tapping than the U.S. law enforcement agencies that requested taps. Not to be outdone, Verizon handed over everything to an Israeli competitor (what are the odds??):

Verizon’s eavesdropping program is run by a competing Israeli firm called Verint, a subsidiary of Comverse Technology (the billing guys), which was founded by a former Israeli intelligence officer in 1984.  Incorporated in New York and Tel Aviv, Comverse is effectively an arm of the Israeli government: 50 percent of its R&D costs are reimbursed by the Israeli Ministry of Industry and Trade. 

Phone calls are intercepted, recorded, and transmitted to U.S. investigators by Verint, which claims that it has to be ‘hands on’ with its equipment to maintain the system.

Great... more 'hands on' guys. But that was ages ago. I mean, what kind of inside information could Israeli companies have got for, oh... ten years or so since the late 90's before being busted?

A Verint spinoff firm, PerSay, takes the tap to the next stage, deploying "advanced voice mining," which singles out "a target’s voice within a large volume of intercepted calls, regardless of the conversation content or method of communication. 

Side note from Wiki: "...Its main investor was SKFT, which handled the venture capital activity of the Shrem Fudim Kelner group..." The old-timers might recognize that 'quality' name. PerSay has since been bought up by Nuance. Yeah, the same guys that Siri ships all the voice commands off to for processing. In fact, the same company that Samsung TVs send every sound they hear if it might be a command. Nuance records a lot for 'quality assurance', but probably not for insider trading. One would hope. But I digress again... 

Well, everyone spies on everyone else. It's not like the Israelis knew who U.S. law enforcement was spying on, right?

In 1997, DEA had transformed its wiretap infrastructure with the $25 million procurement from Comverse/Verint of a technology called "T2S2" — "translation and transcription support services" — with Comverse/Verint contracted to provide the hardware and software. 

Yeah, this wasn't just the Verint/Narus switch equipment anymore. The Israeli companies also TRANSCRIBED the recorded taps. This was (supposedly) to ensure law enforcement only got to read conversations related to their investigations. Analyzing and transcribing took a lot of manpower. You know, like Israeli college students, Israeli industrial spies posing as college students, Israeli stock analysts and traders posing as college students, Jewish mobsters posing as college students. Just a couple of thousand or so (most were part-time contractors). This was all done IN ISRAEL and the transcriptions sent back to the U.S. Eventually, Israeli firms contracted a lot of it out to other foreign firms, especially when foreign language translations were done!

Well, what could possibly go wrong with that? Everyone wanted to get into the snooping business, which gave rise to yet a third big Israeli tapping outfit used mostly inside companies: NICE systems. I don't think I have to point out the access one could possibly have to 'insider' information. Now keep in mind that NICE was inside companies phone and internet networks while Verint and Narus were on U.S. public switches.

During 2000-2001, when agents at the FBI and the CIA began  investigating allegations that Israeli nationals posing as "art students" were in fact conducting espionage on U.S. soil, one of the Israeli "art students" was discovered to be an employee with NICE Systems.  Among the targets of the art students were facilities and offices of the Drug Enforcement Agency nationwide. The same Israeli employee of NICE Systems, who was identified as a former operative in the Israeli intelligence services, was carrying a disk that contained a file labeled "DEA Groups."  U.S. counterintelligence officers concluded it was a highly suspicious nexus: An Israeli national and alleged spy was working for an Israeli wiretap company while carrying in his possession computer information regarding the Drug Enforcement Agency — at the same time this Israeli was conducting what the DEA described as "intelligence gathering" about DEA facilities.

NICE did corporate intel - what the hell did they want with the DEA? Well, who the fuck cares... unless you're a drug dealer... or maybe a member of the New York Jewish Mafia and want to 'expand' to lucrative West Coast and Las Vegas markets that the DEA was doing most of their tapping work. Jewish mobsters would have their moles feed them information on huge drug busts, and then move right into the empty territory to set up shop themselves. They actually took over the entire West Coast cocaine market with that intel (you know those Hollywood types). So it was exploited by the Jewish mob, or maybe Israeli intel picking up some spare change in the U.S. cocaine markets. The DEA was absolutely baffled how quickly the Jewish cocaine dealers moved in.

Eventually, at a big meeting in Australia, the intel brain trust decided to discuss the 'problem'.

The Dutch intelligence service, under contract with Verint, "had discovered strange things were going on — there was activity on the network, the Israelis uploading and downloading stuff out of the switches, remotely, and apparently using it for their own wiretap purposes.  The CIA was very embarrassed to say, ‘We have the same problem.’ 

"The key to this whole thing is that Australian meeting," Bamford told me in a recent interview. "They accused Verint of remote access and Verint said they won’t do it again — which implies they were doing it in the past. 

Verint, Narus, NICE (for some reason) - they were all loaded with people exploiting the phone and internet tapping for all kinds of reasons. Reasons that had absolutely noting to do with U.S. law enforcement or U.S. intel. 

The part Bamford doesn't talk much about is market regulators like the SEC and the worthless DOJ. There were massive cases of insider trading where there was obvious Israeli connections. Everyone knew something was going on - even nobodys like me half-way across the country heard the rumors. Nobody on Wall Street would say anything. That would instantly brand you an anti-Semite, and your career would pretty much be over. A lot of guys here know exactly what I'm talking about. But at least the regulators and the DOJ were all over the Israeli inside traders, right? ER... no...

And that, of course, is the elephant in the room.  "Whether it’s a Democratic or Republican administration, you don’t bad-mouth Israel if you want to get ahead," says former CIA counterterrorism officer Philip Giraldi.  "Most of the people in the agency were very concerned about Israeli espionage and Israeli actions against U.S. interests. Everybody was aware of it.  Everybody hated it.  But they wouldn’t get promoted if they spoke out.  Israel has a privileged position and that’s the way things are.  It’s crazy.  And everybody knows it’s crazy."

That's right, traders. YOU were the biggest chump in the room. God knows how many Israelis were front-running or trading on inside knowledge through phone and internet snooping equpment and services that U.S. law enforcement and intelligence services bought from or contracted out to Israel. And, conveniently, nobody was ever the wiser because nobody in our intelligence services or law enforcement dared to speak out. What happens on Wall Street STAYS in Tel Aviv... er, Wall Street.

So is there any DIRECT evidence of Israeli-connected firms using inside information? Ha ha ha. NO, of course not. Why would the Jewish mob or the Mossad ever be interested in the stock market when they were making decent money moving blow in Hollywood? Yes, that is sarcasm for the otherwise confused.

The biggest scam never to be exposed - I've never touched the markets since except for purely entertainment purposes. Kind of like when you go to the casino and blow $20 on the cheap slots just for the hell of it. I doubt they're doing the same thing the same way today - this was an early 2000's scam. No doubt they've move on to much more lucrative ventures. But don't worry - the SEC is finally all over these damn HACKERS! [facepalm]

[DuneCreature]

Thanks for pulling that information together and posting it, Paveway IV.

I had bits and pieces of it myself.

Watch your back. The venomous serpent we are all dealing with has many, many, lots of many heads.

~ DC