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Startup Manipulated iPhone to Allow Government Spying, Report Says
Israeli firm said to have exploited Apple smartphone flaws to help nations spy on their citizens
Security researchers say a little-known Israeli startup exploited previously unknown bugs in Apple Inc.’s smartphone software to help foreign governments spy on their citizens.
The researchers say the surveillance software was the work of NSO Group Technologies Ltd., which sells primarily to government agencies. The researchers, at Citizen Lab, a group that investigates surveillance technology, and at mobile-security firm Lookout Inc., say they discovered the software in a link sent earlier this month to the phone of Ahmed Mansoor, a human-rights activist in the United Arab Emirates.
Their report sheds new light on the capabilities of private security companies to produce sophisticated software for state-sponsored spying. It also suggests that the iOS operating system behind Apple’s iPhones isn't as impregnable as it appeared earlier this year, when the Federal Bureau of Investigation struggled for weeks and ultimately paid $1 million to unlock a phone tied to the San Bernardino terror attack.
NSO Group’s software takes advantage of three previously unknown flaws in iOS to install itself on an iPhone, where it then transforms the phone into a surveillance device, tracking its movements, logging messages and downloading personal data.
In a statement Thursday, Apple said it had been “made aware of this vulnerability and immediately fixed it.” The company advised iPhone users to download the new version of iOS, dubbed 9.3.5.
Mike Murray, Lookout’s vice president of security research, said the NSO software, called Pegasus, is “the most professional piece of spyware that I’ve ever seen.” He said the software operates stealthily, ensuring that it doesn’t quickly drain the battery and speeding up its data transfer when it is on Wi-Fi networks so that it doesn’t get noticed.
An NSO spokesman said the company had no knowledge of Mr. Mansoor’s case. In a statement, the spokesman said, “NSO’s mission is to help make the world a safer place, by providing authorized governments with technology that helps them combat terror and crime. The company sells only to authorized governmental agencies, and fully complies with strict export control laws and regulations.”
The spokesman said NSO doesn't operate its systems, and requires customers to use them lawfully and only “for the prevention and investigation of crimes.”
“We’re a complete ghost,” NSO co-founder Omri Lavie told Defense News in a 2013 interview. “We’re totally transparent to the target, and we leave no traces.”
The Wall Street Journal in 2014 reported that the company had been acquired by private-equity firm Francisco Partners for $110 million. Francisco Partners had no immediate comment.
Researchers highlighted the unusual way that Pegasus is installed on a phone, taking advantage of the three flaws in iOS to silently “jailbreak” the phone and circumvent the requirement that only Apple-approved software runs on the device. This type of one-click iPhone attack previously has been described by researchers but never been seen in a real-world attack, Lookout’s Mr. Murray said.
Mr. Mansoor said he received a text message Aug. 10 from a phone number he didn't recognize that said, “New secrets about torture of Emiratis in state prisons.” He said his suspicions immediately were aroused. “I could tell that there was something wrong and I contacted the Citizen Lab team immediately.”
At Citizen Lab, researchers found that the link in Mr. Mansoor’s text message led to a website that they previously had connected to NSO Group. That website launched the Apple attack and installed the Pegasus spyware.
Although these products typically are marketed as legitimate tools sold only to law enforcement, some governments use them to spy on activists and journalists, said Bill Marczak, a senior researcher with Citizen Lab.
After the attack on Mr. Mansoor, Citizen Lab linked NSO to 2015 attacks on a Mexican journalist who received text messages that were similar to Mr. Mansoor’s.
Mr. Mansoor believes that he was the target of U.A.E. officials looking to keep tabs on his online activity.
A U.A.E. official declined to comment.
*RACKSPACE IN A $4.3B TRANSACTION TO BECOME A PRIVATE CO.
AB InBev Warns of Thousands of Merger-Related Job Losses
Beer giant talks of shedding 3% of workforce over coming years in integrating SABMiller
Belgium’s Anheuser-Busch InBev NV warned Friday its beer megamerger with SABMiller PLC could lead to thousands of job losses in coming years, according to documents related to the transaction.
The company said that around 3% of the total workforce of the combined group could be laid off, but said “job reductions will be implemented gradually, in phases, over a three-year period following” the completion of the merger.
A person familiar with the details said the estimated job losses are around 5,500.
AB InBev says it currently employs around 150,000 people while SABMiller puts its workforce at around 70,000. However, SABMiller is due to dispose of most of its European assets under the deal.
AB InBev said the 3% figure excludes sales and front-office supply staff. The company said it wasn’t able to advance its integration plans for the workforce in those position because of regulatory restrictions.
AB InBev said last month it continues to work to close the $100 billion-plus merger deal this year. It has projected savings of $1.4 billion from the merger.
Acquiring SABMiller would give it access to the fast-growing African beer market and reduce its reliance on the U.S.
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- TLND -13.9%, ACET -10.5%, ULTR -7.9%, GME -7.7%, SPLK -6.3%, AMSWA -5.2%, GSM -2.1%
- ULTA -1.3%, ZAYO -0.8%, BRCD -0.6%, TTM -0.6%, BIG -0.5%
Other news:
- XCOM -14% (following 40% move higher)
- HLF -5.1% (Carl Icahn considered selling HLF stake, according to WSJ)
- SYNA -4.5% ( files to delay Form 10-K citing matters arising late in the year end reporting process )
- VNDA -1.2% (modestly pulling back after 20% intraday move higher on patent news)
- CEMP -0.6% (announces the publication of its pivotal Phase 3 study SOLITAIRE-IV)
- GES -0.5% (small pull back following 20%+ earnings move higher)
Analyst comments:
- URI -1% (initiated with a Underperform at Macquarie)
- NKE -0.8% (downgraded to Neutral from Buy at B. Riley & Co)
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- PSTG +12.4%, EPAY +8.5%, (also announces $60 mln stock repurchase program), UEPS +6.7%, QURE +3.2%, ADSK+2.8%
M&A news: BUD +0.9% (Bloomberg reports that In Bev (BUD) is planning to eliminate 5500 jobs following Sabmiller (SBMRY) deal)
Select metals/mining stocks trading higher:
Select metals/mining stocks trading higher:
- CDE +3.1%, AU +3%, AG +3%, AG +2.7%, KGC +2.5%, SLW +2%, ABX +1.7%, RIO +1.6%, GOLD +1.4%, NEM+1.4%, GDX +1.3%, BBL +1.2%, SLV +1%
Other news:
- DVD +18.1% (thinly traded, Dover Motorsports to sell its Nashville Superspeedway facility to an entity owned by Panattoni Development)
- JMU +15.1% (Wowo states that its business scale does not include P2P financing and P2P internet lending service and announces Xiao Nan Guo Restaurants will acquire 9.82% stake at $6.00/share )
- WCIC +6.2% (light volume, to join S&P SmallCap 600)
- LEI +5.8% (Lucas Energy enters into agreement with its senior lender, plans to use the funds to participate in the drilling and completion of certain Eagle Ford wells under a joint operating agreement with Lonestar Resources)
- NLS +5.3% (to join S&P SmallCap 600)
- TGTX +5.1% (confirms Orphan Drug Designation for TG-1101 for the treatment of neuromyelitis optica & neuromyelitis optica spectrum disorder)
- BOFI +3.6% (modestly pulling back following yesterday's advance)
- WNR +2.3% (CEO disclosed purchase of 100K shares)
- NYMX +2.2% (continued strength)
- XONE +2% (CEO disclosed purchase of 7,200 shares worth abt $103K (transaction date 8/24) )
- ON +1.9% (Littelfuse to acquire the product portfolio of transient voltage suppression diodes, switching thyristors and insulated gate bipolar transistorsfor automotive ignition applications from ON Semiconductor for $104 mln; ON Semiconductor confirms FTC clearance of its pending acquisition of Fairchild Semiconductor)
- GLAD +1.9% (insider purchase by President, R. Marcotte, who bought 6K shares worth abt $51K)
Analyst comments:
- PQ +30.1% (upgraded to Buy at Johnson Rice)
- PBR +1.3% (upgraded to Neutral from Underperform at Credit Suisse)
Carl Icahn Mulled Selling Herbalife Stake to Group That Included Bill Ackman
Twist in billionaires’ feud is latest in tug of war over nutritional-products company
Carl Icahn has recently discussed selling his stake in Herbalife Ltd. to a group including the company’s arch-nemesis William Ackman, another surprising twist in a battle between billionaires that has riveted Wall Street for years.
Investment bank Jefferies Group LLC has been seeking over the past month to find buyers for Mr. Icahn’s 18% stake, which is worth roughly $1 billion, people familiar with the matter said. The status of the talks and which other investors may be involved wasn’t clear and Mr. Icahn may sell nothing in the end.
The fact that he even entertained selling his shares, by far the biggest single stake in Herbalife—and that Mr. Ackman could be a buyer—adds more drama to a tug of war over a once-obscure nutritional-products company that Mr. Ackman says is a pyramid scheme, an allegation it denies. The latest development is especially surprising given that just a month ago Mr. Icahn expressed renewed confidence in Herbalife, which in settling a closely watched Federal Trade Commission probe announced he was allowed to boost his stake to just below 35%.
Mr. Ackman kicked off the fight in 2012 with a widely watched presentation and a $1 billion bet that the stock would collapse. Mr. Icahn joined the battle a few months later and soon after got several Herbalife board seats. Since then, the men have screamed at each other on live television and they and the company have traded legal accusations amid multiple investigations and a feature-length documentary that premiered at the Tribeca Film Festival.
Herbalife has fought back just as fiercely against Mr. Ackman. The Los Angeles company has maintained throughout that it doesn’t break the law and accused Mr. Ackman of market manipulation. The stock price has gone decidedly in the company’s and Mr. Icahn’s favor, rising roughly 70% since he first disclosed his bet on the shares in February 2013. Its shares closed Thursday at $61.93, nearly double Mr. Ackman’s breakeven price in the low-$30s range. Herbalife has a market value of about $5.6 billion.
Last month, the company settled with the FTC, paying $200 million and agreeing to make changes to its business. Mr. Icahn and Mr. Ackman both claimed victory. Mr. Ackman said the business changes would lead to a collapse of the company.
Mr. Icahn countered that the settlement proves Herbalife isn’t a pyramid scheme and said the company would thrive.
“The cloud over Herbalife is gone,” Mr. Icahn said then. It isn’t clear why he may be willing to sell now.
Mr. Icahn has been selling several stocks this year amid his wariness of the overall market, even ones in which he has expressed confidence. In April, for instance, Mr. Icahn exited Apple Inc., which had been his biggest investment and whose shares he often predicted would rise dramatically. At the time, he said he continued to support the company’s management and believed it would flourish, but he had made a large profit.
Mr. Icahn often works with Jefferies on such deals, including the exit of a block of shares in Hain Celestial Group Inc. in 2013.
That Mr. Ackman would consider buying, however briefly, into a company he has waged a crusade against is less surprising than it might seem. He had only signaled willingness to buy a small portion of the stake, one person said. He has long blamed Mr. Icahn for boosting the stock, saying it’s something he hadn’t bargained for when he plotted the campaign.
“I would love to find a way to get Carl out of the stock,” Mr. Ackman said at CNBC’s Delivering Alpha conference in July 2014.
He has promised to take his quest to shut down Herbalife “to the ends of the earth.”
Rumors about Mr. Icahn possibly selling have periodically helped push the much-rumored shares down, including earlier this week.
Wall Street has often appeared more captivated by the thrill of watching two giants of investing go toe-to-toe than by the underlying issue of what qualifies as a pyramid scheme or a legitimate business.
Herbalife sells products including nutritional shakes and meal-replacement bars through a network of distributors who can also sign up new recruits and get paid based on a portion of what they bring in. The debate over the company turns on whether or not Herbalife’s business model allows legitimate entrepreneurs to sell its products. In the first quarter, the company reported a profit of $96 million on sales of $1.12 billion.
Mr. Ackman contends it is all a scheme that allows a group of individuals to prey on unsuspecting newcomers whose own purchases create incentive payments up the chain but have little hope of finding buyers for the goods.
Mr. Ackman has made several multiple-hour presentations that have gone into excruciating detail on his arguments, which touch on Herbalife’s “nutrition clubs” and its business in China. He billed one presentation as a “death blow” only to see the stock soar as he pitched his arguments.
Other big names in investing took the other side of the bet from Mr. Ackman, a common occurrence in the highly competitive world of Wall Street.
In early 2013, the fight took on a different proportion. Messrs. Icahn and Ackman both wound up on the phone with CNBC at the same time. Mr. Icahn called Mr. Ackman a “crybaby in the schoolyard.” Mr. Ackman retorted that Mr. Icahn was “not an honest man.”
The two men ended their feud the following year, when Mr. Ackman called Mr. Icahn to make peace. They hugged on stage at the CNBC conference and Mr. Ackman hinted that he would be interested in buying Mr. Icahn’s stake in Herbalife.
Frankie & Benny’s owner, the Restaurant Group, which changed chief executive a few weeks ago following a period of substantial underperformance, is launching an overhaul of its operations that will see it scrap a slew of outlets.
The company, whose share price has almost halved over the last two years, will axe 33 underperforming outlets, a move that has landed it with a £59.1m impairment charge.
This, combined with a 3.9 per cent slide in like-for-like sales in the 27 weeks to July 3, dumped the company into the red during the first half.
The Restaurant Group, which also owns the Mexican-themed chain Chiquito, racked up a pre-tax loss of £22.5m, compared with a profit of £38m in the same period last year.
The company said its strategy review revealed that Frankie & Benny’s “weak performance” has been less a result of competition and more a consequence of problems of its own making.
It said it has driven customers away by removing “many popular dishes from the menus”, forcing through “above market increases in food and beverage pricing” and lumping diners with “inconsistent and unsatisfactory service experience”.
The company said:
Frankie & Benny’s performance has suffered due to insufficient focus on value, unsuccessful menu development and poor operational executionWe have lost value-conscious customers, a result of significant price increases and the removal of popular value offersIn 2015, we began to introduce more “authentic” menus without sufficient testing of the concept. This led to the removal of many popular dishes from the menus and led to a further decline in covers.
It hopes to remedy these failings by:
- Refining the proposition with greater focus on families (our core customers)
- Testing and trialling new value offers
- Adding back popular dishes to the menu
Earlier this month the company said former chief executive Danny Breithaupt was stepping down with immediate effect as, after a review, it had “decided that a new leader is needed”. The shares promptly surged to have their best day in five years. Mr Breithaupt’s two-year tenure coincided with a 44 per cent fall in the share price.
Debbie Hewitt, chairman said today:
This has been a challenging trading period for our Leisure brands, albeit with a good performance from our pubs and concessions businesses. The Board has moved quickly to undertake a review of the operating strategy and we now have clarity on the issues facing our Leisure brands, particularly Frankie & Benny’s. The brand remains relevant and popular and we are confident that improved performance will be achieved by being more customer-focussed and data-driven, and through better operational execution.A new executive team is in place to lead the implementation of this first phase of the review and to apply the learnings to our other brands.