Concerns over the activities of a malicious hacking group targeting executives at publicly traded firms has apparently prompted the U.S. Securities and Exchange Commission (SEC) to launch a rare investigation of its own about the threat.
The SEC has contacted at least 8 public companies for information pertaining to recent breaches at their organizations, Reuters reported earlier this week citing sources familiar with the matter. The SEC probe, and another one being conducted by the U.S. Secret Services were both prompted by the report from FireEye, Reuters said.
FireEye first reported on the group, dubbed FIN4, in a report titled "Hacking The Street" last year. Researchers at the firm described FIN4 as a group that targets the email accounts of executives with access to a lot of confidential information at the companies they work.
The group has been operating since at least 2013 and is focused on gathering non-public information about merger and acquisition deals and other potentially market moving information for use in illegal trading. Most of the group’s targets have been top executives such as C-level executives, legal counsel and outside consultants, particularly from organizations in the pharmaceutical and healthcare industries, FireEye had noted.
The SEC did not respond to a request seeking comment on its reported probe of several publicly traded organizations.
John Stark, an independent consultant and former SEC enforcement attorney on cyber-related projects, says he has information the Commission has launched a probe that appears tied to the FireEye report. “The SEC has ventured into cybersecurity in different ways,” Stark says. “If somebody is out there saying that hackers are using their wares to commit corporate espionage and steal non-public, material information, the SEC is best equipped to understand” what might be going on, he said.
It remains somewhat unclear what the SEC would really be able to do with any information that it gathers from the organizations that it is contacting in connection with the FIN4 group, Stark says.
In the past, they have issued all sorts of informal guidelines to public companies with respect to their disclosure of any sort of data breach or to the risk of a data breach. For regulated entities like broker/dealers, the SEC has issued guidelines on what it expects firms to do in terms of protecting customer data. With publicly traded companies the emphasis has been more on disclosure related issues, Stark says. For the most part, the SEC has been careful about minding its own jurisdiction on cybersecurity matters, Stark says. “But in this instance, they really are best equipped to understand and analyze the potential use of material, non-public information,” by FIN4, he says.
According to FireEye, most of the information it has on the group has come from its analysis of incidents on client networks. The evidence suggests that FIN4 intentionally targets individuals that it knows has access to inside information on impending, potentially market-moving events at their organizations. On multiple occasions the group has targeted multiple people involved in a single deal.
The group’s typical tactic is to use well-crafted spearphishing emails to gain access to their victim’s systems. The rogue emails appear written by native English speakers with a good understanding of investment terminology and the manner in which public companies operate.
FIN4 does not infect victim systems with malware. Instead, its approach is to try and acquire the usernames and passwords of their targets in order to view private email correspondence, FireEye said.