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Hacked! The Epidemic Continues

4 March 2013 in Trading Ideas

The Federal Reserve. Apple. The New York Times. All big names, and all recent victims of hacking.

In the case of the Federal Reserve, hackers were able to obtain a spreadsheet containing the names of 4,000 U.S. banking executives, along with their IP addresses, contact information and even login credentials1.

At Apple, malware infected the computers of software developers who visited a compromised website. The incident echoed recent attacks on employee computers at Microsoft and Facebook2.

And at the New York Times, reporters involved in a series of articles on corruption in China found that their email accounts had been hacked. The Washington Post and Wall Street Journal experienced similar attacks – also targeted at reporters focused on China.

Hackers have been a problem since the dawn of the computer age, and they range from the relatively benign to the more sinister. Some of the most recent incidents appear to belong to the latter category.

For example, a recent study by the security firm Mandiant traced an epidemic of computer attacks to an area in China. The report points to possible “economic espionage” and indicates that the Chinese government is likely aware of, and perhaps even employs, the hacking operation3. A study by another firm, Team Cymru, said that a terabyte of information was stolen from U.S. computers every day by hackers located overseas4.

The issue is gaining national attention. In the State of the Union address, President Obama brought up the importance of cyber security when he announced his executive order to improve the country’s defenses against cyber-attacks. The order calls for better information sharing regarding cyber threats and incentives to encourage the private sector to adopt new standards to reduce cyber security risks.

The Cyber Security motif, up 9.4% in the past month, contains companies focused on defending companies against hacking and cyber-attacks.