cybersecurity

Equifax Inc. Chief Executive Officer Richard Smith stepped down, joining other senior

Paulino do Rego Barros Jr., left, and Mark Feidler

Source: Bard Wrisley/Equifax

managers who left the credit-reporting company in the wake of an uproar over the theft of private data on 143 million Americans.

Smith will be replaced on an interim basis by Paulino do Rego Barros Jr., 61, a seven-year company veteran who was most recently president of the Asia-Pacific region, the Atlanta-based firm said Tuesday in a statement. Board member Mark Feidler, a former BellSouth Corp. president, was named non-executive chairman.

“The cybersecurity incident has affected millions of consumers, and I have been completely dedicated to making this right,” Smith said in the statement. “At this critical juncture, I believe it is in the best interests of the company to have new leadership to move the company forward.”

Equifax has drawn outrage from lawmakers and scrutiny from regulators since Sept. 7, when it disclosed one of the biggest cyberattacks in history. Hackers stole sensitive data — including Social Security numbers, birth dates and other identifying information — for much of the adult U.S. population. Smith will still testify before Congress next week about the breach, Equifax spokeswoman Ines Gutzmer said in an email.

Senator Mark Warner, a Virginia Democrat, called Equifax “a travesty” during a Senate hearing on Tuesday, saying Smith’s resignation “is by no means enough.” Senator Brian Schatz of Hawaii said the company needs to be held responsible for its actions.

“A CEO walking out the door just days before he is to appear before Congress is an abdication of his responsibility,” Schatz, a Democrat, said in a statement.

Jaret Seiberg, a Cowen & Co. LLC analyst, said Smith’s immediate departure could be a “political positive” for Equifax, compared with him leaving under pressure after the hearings.

Equifax shares fell 1.3 percent to $103.68 at 11:33 a.m. in New York and have tumbled 27 percent since the hack was announced. Smith’s departure is an “incremental negative,” SunTrust Robinson Humphrey analyst Andrew Jeffrey said in a note to investors.

“Rick Smith has been integral to Equifax’s impressive decade-plus long growth,” said Jeffrey, who has a buy rating on the stock. “We would have liked to see him weather this storm.”

Smith has $18.4 million in retirement benefits and could stand to get millions of dollars more, including lifetime health coverage, according to a regulatory filing. A decision about how much he will receive will be deferred until the board completes its review of the breach, the company said Tuesday in an updated filing. He won’t get a bonus for fiscal 2017.

Return Pay

Senator Elizabeth Warren, a Massachusetts Democrat, called on Smith and other Equifax executives to return some compensation and said Barros and Feidler should also testify before Congress.

“It’s not real accountability if the CEO resigns without giving back a nickel in pay and without publicly answering questions,” Warren said in a statement.

Barros, who joined Equifax in 2010, was previously head of U.S. Information Solutions, the company’s largest unit. Before joining the credit-reporting firm, he was founder and president of PB&C – Global Investments and earlier was president of global operations for AT&T Inc.

Smith, who will remain as an unpaid adviser to the company, isn’t the first executive to leave in the wake of the disclosure. The firm’s chief information and chief security officers departed as of Sept. 15, the company said in a statement that didn’t identify the executives. David C. Webb, who joined the firm in January 2010, was previously chief information officer, according to an annual regulatory filing in February. Susan Mauldin had been chief security officer, according to her professional profile on LinkedIn and an Equifax press release from 2015.

GE Alumn

For more on Equifax, check out the podcast:

Mark Rohrwasser was named interim CIO and Russ Ayres was appointed interim CSO, reporting to Rohrwasser, according to the Sept. 15 statement.

Smith joined Equifax as CEO in 2005 after spending more than two decades climbing ranks at General Electric Co., where he worked in divisions focusing on plastics, modular homes, car fleets and insurance. Over almost 12 years at Equifax, the company’s stock more than quadrupled before the breach was announced.

On Sept. 13, Equifax conceded that hackers exploited a software vulnerability known as Apache Struts CVE-2017-5638. Computer-security specialists had publicly identified that weakness earlier this year, offering a patch to fix it in March. Equifax has said the breach happened sometime after mid-May and was discovered July 29.

“This is the most humbling moment in our 118-year history,” Smith wrote in an op-ed posted to USA Today’s website Sept. 12. “We apologize to everyone affected.”

Two days later, Senate Minority Leader Chuck Schumer called for Smith and the company’s board to quit. The incident is “one of the most egregious examples of corporate malfeasance since Enron,” the Democrat said, referring to the Texas energy trader that collapsed in 2001 after lying about its finances.

Lawmakers have threatened to boost oversight of the industry, which is supposed to safeguard data that could be used for identity theft and fraud. The Federal Trade Commission announced a probe, citing the “intense public interest and the potential impact.”

HBO is at the center of a massive cyberattack putting 1.5 terabytes of valuable intellectual property and private information at risk. Now the hackers who purportedly executed the attack are back to brag about it.

The hackers who dumped unreleased HBO show scripts, videos, internal documents, emails, and more last week have returned with a second batch of data containing even more sensitive information.

Mashable was able to obtain a portion of the new documents, and they appear to be real. We’ve reached out to HBO to confirm the legitimacy of the files and will update when we hear back.

The second leak includes purportedly leaked scripts and full seasons of various HBO shows, including Curb Your Enthusiasm and Ballers, in addition to more scandalous material like what appears to be HBO CEO Richard Plepler’s contact list.

But perhaps the most perplexing is a roughly 5-minute long video ransom note set to the Game of Thrones soundtrack included in the dump. In the video, hackers claim to have reproduced the ransom message sent directly to HBO CEO Richard Plepler demanding money for the stolen data.

“Our demand is clear and Non-Negotiable: We want XXXX dollars to stop leaking your Data,” the video message says. “”HBO spends 12 million for Market Research and 5 million for GOT7 advertisements. So consider us another budget for your advertisements!”

Our best guess is the “XXXX” included throughout the video is to serve as a redaction of the ransom amount asked for by the hackers.

Later the video text says, We often launch two major operations in a year and our annual income is about 12-15 million dollars…You pay our 6 month salary in bitcoin and we get away from your map.” That would make a ransom of $6-7.5 million.

Update 8/8/17 (12:11 p.m. ET): An HBO spokesperson sent Mashable the following statement in response to the video:

HBO believed that further leaks might emerge from this cyber incidentwhen we confirmed it last week. As we said,the forensic reviewis ongoing. While it has been reported that a number of emails have been made public, the review to date has not given us a reason to believe that our e-mail system as a whole has been compromised.We continue to work around the clock with outside cybersecurity firms and law enforcement to resolve the incident.Meanwhile, ourdedicated employeescontinue to focus on deliveringthe high quality of entertainment and service for which we are known.

Update 8/8/17 (12:26 p.m. ET): Here is full text of the ransom message purportedly sent to HBO CEO Richard Plepler:

Dear Richard Plepler;

I am Mr. Smith and I have the honor to inform you, on behalf of my colleagues, that we successfully breached into your huge network.

We are glad to say that in a complicated cyber operation, infiltration to your network accomplished and we obtained most valuable informations. (1.5 Terabyte)

We confess that HBO was one of our difficult targets to deal with but we succeeded. (It took about 6 months).

By penetrating your Internal Network and other related platforms, we obtained your highly confidential Documents, IT related data, Scripts and etc. these data dump, as you will see, contains HBO’s Various Contracts, Mutual Agreements, Human resources, internal structure, International affiliates, Business strategies, international Marketing, IT infrastructures, producing films & Series (with very detail info!), budget detail for major operations, how you sell and how much!, various strategic insights in every aspects, confidential research, internal letters & Tax Evading Proofs! & Nielsen’s Dirty Job! & etc.

Also, we obtained full scripts and cast list of your (and our) very popular TV series; Game of thrones S7.

You concealed GOT7 very carefully so we can’t find it due to lack of time although we are so close. Instead, we produced some tiny mini-series of GOT 7 for you which be able to shock the entire world!!!

What we got from GOT 7 not only put an end to fate of this season but also corrupts your idea and efforts to season 8.

Don’t hesitate to search, we obtained enormous amount of Full scripts and full length films and series which will be broadcast in upcoming months! We put our logo “HBP Is Falling” on all of them for future possible release !!! We are hackers for accept our apology for amateur mixing!

Now, we have your precious data which costs you millions of dollars: Insecure2, The Deuce S1, Barry S1, Room 104 S1, Ballers S3, Vice Principals S2, Steven Spielberg Documentary, A world in disarray, Tour de Pharmacy, Deffiant Ones and etc.

We noticed that HBO seriously keeps its work products, Inventions, raw materials and etc by various security measures and confidentiality, so it’s obvious for us (and you), by revealing such data what will confront your empire.

Leakage will be your worst nightmare; your competitors will know about your current & future strategies, your inner circle inside HBO & senior staff will be thrown into chaos, your views specially fans became very upset and they blame you rather than us!, downfall in stocks will be predictable and so on. As you are in the business from decades, you yourselves will be full aware of catastrophic consequences …. So make a wise decision!

HBO is pioneering in TV programming worldwide and doesn’t want to lose this situation. More than that, HBO is promoting democracy, women rights, freedom and justice in the world and losing this leadership will be painful and catastrophic.

We are your fans as are many other ordinary people. We know that HBO walked a long way to reach current situation. By Analyzing Vivienne Eisenberg’s profile, we noticed how difficulty way you go to be the first in the market…. Our motives isn’t political nor financial. (Even we hate trump like other Americans do) Its like a game for us, we enjoy to get data. Money isn’t our main purpose.

(my colleagues argue with me about details given to you and length of this letter, but as there will be very few emails between us, I must assure you about what we have, what will be confronting you and what should be paid to settle down everything!!)

We honestly share what we got with you and frankly bring you our demand. We are whitehat hackers and it’s very shameful if you compare us with some noisy & amateur blackhat ones like Darkoverload. You will see in future steps in our operations that we fulfill any promises made and any given word.

We don’t want to endanger HBO’s situation nor causing to lose its reputation. We want to be your partner in a tiny part of HBO’s huge income.

HBO is an important part of Time Warner’s vast array of networks and productions businesses and your estimated annual sale in 662 million dollars in one fiscal year. As all of us know “Very well”, This number is official crap and some-how wrong. By analyzing your financial records, we see billions rather that millions, may be some tax evading proofs, so what? It doesn’t matter, we want only XXXX dollars. In your opinion, is this a greedy number for saving your 1.5 Tb Confidential data from being released?

HBO spends nearly 100 million to produce GOT6 and spends lots of money for series like Insecure, Ballers, The Deuce, Barry, Room 104 and …. . Now we have final scripts and final video files of them. HBO spends 12 million in 2017 for Market Research and 5 million for GOT7 advertisements. So consider us another budget for your advertisements!

Our demand is clear and Non-Negotiable: we want XXXX dollars to stop leaking your Data.

I know (as witnessed in our other operations) that a greedy CEO or an Idiot one who doesn’t understand the new era of cyberspace or a fucking, Full of Pride, FBI fat-ass agent, tells you Don’t pay them, How trust them? What if they release the data even they have been paid? By paying money, you keep them in the circle!

The answer is simple: we are white-Hat. You must trust us. The HBO is our 17th Target. Only 3 of our past targets refused to pay and were punished very badly and 2 of them collapse entirely.

How are you able to stop a group like us that spends about 400-500,000 dollars in a year to buy 0days exploits? We often launch two major operations in a year and our annual income is about 12-15 million dollars. We are serious enough to do our business, the main questions is this: How much is your seriousness to keep your empire on its feet in a NEW BRAVE WORLD?

Don’t call us nasty Hackers, we are IT professionals, consider what is done to you as a huge pentest.

For building mutual trust and confidence, we send you, our entire arsenal! (Except on package for ;last possible Leak which surprises not only you but entire world!). We don’t play with you so, you in return, don’t play with us. You only have 3 days to make decision so decide wisely.

You pay our 6 month salary to bitcoin and we get away form your map. As we witnesses in other cases, Fucking FBI or other police enforcements, teach you couple of outdated trick to play with us and buy time. It doesn’t work with us.

We set a time line for you in 7 weeks of GOT 7 and you pay the money in the way we say. I repeat again, don’t play with us, its only your decades of dignity and heavy efforts that will be played with.

If you pay, both of us will be glad, and every one goes to his work. If NO, then we are still happy, we release the entire collection and set an example of Idiot and old-fashioned collapsing player in the field for our future targets. So you will be the loser and we are still in the field!

You must understand that we are in the new world. You cannot ignore players like us. HBO must adopt itself with new circumstances. Doing so, set you straight forward and Lucky. by ignoring this new era, the first victims will be your reputation and your empire.

There are several disputes between by colleagues about your possible reactions. It’s like betting. Some of them (by analyzing some of your CEO and their attitudes) tell me that you don’t pay. I and some others, being optimistic, will count on your true & wise decision. It’s up to you!

Some final quotes:

First of all declare your surrender! We only communicate with Richard. Send an email and declare it frankly that you accept our terms.
You have 3 days for analyzing the data and the damages it brought and etc. its natural. Forget about 4th date for negotiate. In 4th day, we begin to release….
Do the bitcoin job quick. Some banks in USA have problems in exchanging bitcoin and caused trouble in past. We don’t accept sentences like: we want to pay but banks are lazy and don’t cooperate. Its your problem. Give some bucks, they do like slaves.
Look at below chart every often. It is leakage schedule. We are man of our words. If you like, try us. We release what be declared as written in chart.
We know a lot about your promoting strategies for your series and other stuff. Thanks to your endless efforts in this field, our leakage will be very time consuming and step by step. We will use your communicating ways to spread the content to entire world. For example your huge list of journalists who promote you, will be the ones that spread our words. Nice try like Zoe Barnes in House of Cards! Some of them ambitious and like to go upward so spreads well!
We want a clean operation, if any word got to press or others, then we consider it as breach of contract and despite our chart (step-by-step leakage) we release the entire data at once.
Don’t go to FBI or other fucking IT Idiots. They are so busy or shoe makers! If you have strong enough IT infrastructures, we can’t get your data. In this situation, It’s worthless for begging security from them. We are far enough to catch (Catch me If you can!). This is your empire that is shaking and collapsing. I know that you don’t listen to this advice, its natural. But remember, by confronting any danger, we ignore the chart and release the data at once.
We will write only 1 extra letter for declaring bitcoin transfers. There will be no “Tom & Jerry” game!
There are 2 mottos. Which one is remembered?

Winter is Coming HBO is Falling

Winter is Coming HBO is standing & Everlasting !

As Architect said in Matrix II: “the problem is choice!”

Good luck to HBO

HBO hack ransom note: Watch the video, set to Game of Thrones music

WATCH: Rogue deer tackles innocent man in a parking lot

How Can We Reduce Costs For Your Business?

Expense Manager Services