Why DNC Hack Should Serve as a Harsh Lesson for Businesses​

The recent revelation that Russia may have hacked into the Democratic National Committee’s (DNC) email database has brought the topic of Advanced Persistent Threats (ATPs) back to the forefront of cyber security experts around the business world.

According to a report by on Reuters, U.S. Democratic presidential candidate Hillary Clinton has stated that Russian intelligence services were behind a sophisticated attack that saw thousands of internal emails stolen. Although these accusations have been refuted by Russian officials, the issue remains unresolved which is significant for two reasons.

Firstly, even if the Russian’s aren’t involved as Israel’s intelligence forces suggest, the latest hack shows the danger ATPs can pose to powerful government agencies. Secondly, if a major entity like the DNC has trouble dealing with ATPs, then businesses around the world need to take the threat extremely seriously.

Given the complexity of an ATP, big businesses are usually the target for hackers and any company that falls victim to an attack can find their bottom-line in serious trouble. As outlined by the Ponemon Institute’s 2015 Cost of Data Breach Study, the average financial impact of a breach is now $3.79 million. Surveying 350 companies in 11 countries, the study found that the cost of an attack had jumped 23% in two years.

A Three-Stage Threat

Analysing the basics of an Advanced Persistent Threat (ATP), Imperva Incapsula breaks down a successful attack into three stages:

  • Network infiltration
  • Expansion of the attacker’s presence
  • Extraction of amassed data

Using a combination of malicious uploads (such as SQL injections), Trojans and backdoor shells and then DDoS attacks (to act as a distraction), hackers can enter and extract data from a target site virtually undetected. Indeed, one of the reasons ATPs are so effective is that the distraction tactics often mean the real threat isn’t discovered until it’s too late.

By this point, the victim is forced to piece together a myriad of information in order to track it back to the attacker. Indeed, this is something the DNC is now facing. Even if Russian forces had something to do with the incident, it will take many weeks, and potentially, months, for the DNC’s security experts to determine the source of the email hack.

WAFs More Important than Ever

While political parties and governments will have their own means of protecting their servers, businesses wanting to avoid a similar fate should use web application firewalls (WAFs) to bolster their defences. When used in conjunction with security hardware, WAFs provide a vital layer of protection against ATPs.

By using traffic monitoring to guard against SQL injections, offering provisions for access control (restricting employee’s system access for their own protection) and more, WAFs can help protect businesses from ATPs. Of course, if the DNC can fall victim to advanced hackers, anyone can. Indeed, the DNC’s email breach should serve as a warning to all business out there, regardless of how secure they believe their systems are.

UK engineering consultant WS Atkins considers selling North American unit

UK engineering consultancy WS Atkins Plc (LON:ATK) is looking into strategic alternatives for its loss-making North American construction unit Peter Brown and expects to be clear about its future this summer, finance director Heath Drewett told Reuters.

The options Atkins is looking at include a closure or a disposal of the operation. An exit would be part of a plan to concentrate on more profitable activities in the engineering and design consultancy field.

In a trading statement, the company said that Peter Brown is still experiencing soft market conditions, but expects an improved margin performance in the second half. The construction management business is seen to post a loss of some GBP6m (USD9.2m/EUR7m) for the fiscal year to 31 March 2013 due to additional costs in closing out its legacy contracts.

However, Atkins anticipates to report annual results slightly ahead of previous projections thanks to the strength of its UK operations. According to Drewett, the company is also considering some acquisition opportunities in the US and the Asia-Pacific, even though it prefers to grow organically. It targets aerospace and defence as well as energy businesses.

Global economy faces continued sluggish growth, according to Dun & Bradstreet

US commercial information provider Dun & Bradstreet (NYSE: DNB) said it has published a five-year forecast of the global economy predicting continued but sluggish growth against challenging headwinds, differing from region to region.

D&B said that its Global Economic Outlook to 2017, based on a study and analysis of its proprietary business data and external data sources, provides insights on several contributing factors to real GDP growth for more 132 countries, representing seven major geographic areas.

According to D&B concerns over a double-dip recession in the US are unfounded despite the fiscal policy challenges. The significant improvement in the health of the corporate sector in combination with moderate consumer spending growth are offsetting austerity that will be required at all levels of government.

Growth remains constrained but the recovery continues to gradually gain momentum.

The outlook for European economies remains troubling. The immediate crisis in the Eurozone has subsided, but the underlying challenges in the region remain substantial.

While attention remains focused on fiscal and monetary policy D&B remains concerned about the competitiveness of European economies and the ability of their business sector to offset fiscal restraint. The outlook for the region remains unsettled with substantial downside risk given policy uncertainty.

In 2012, three years into the recovery, D&B downgraded 32 countries in its country risk analysis–the third highest number of downgrades in one calendar year–while only upgrading seven.

Risk ratings for 56 of the 132 countries are worse than in October 2009 when the recovery started, while only 23 are better.

Dex One, SuperMedia get shareholder approval for tie-up, file for bankruptcy

US marketing services firm Dex One Corp (NYSE:DEXO) and advertising agency SuperMedia Inc (NASDAQ:SPMD) said today that each of them had received shareholder approval for their planned combination and had voluntarily filed for a pre-packaged Chapter 11 bankruptcy protection to implement the merger.

The companies stated that the reorganisation plan would assist the progress of their merger, which was agreed in August last year and is now expected to be completed within 45 to 60 days, subject to court approval. The transaction, which was revised in December 2012 to include extended terms of the credit agreements, has also received approval by the majority of lenders, Dex One and SuperMedia said, adding that they had substantial cash balances and did not plan to seek debtor-in-possession financing during the reorganisation.

As part of the merger agreement, Dex One’s shareholders will receive 0.20 shares in the enlarged group for each of their units and SuperMedia’s stockholders will get 0.4386 shares for every single unit they own. As a result, the existing shareholders of Dex One will control some 60% of the combined company, while those of SuperMedia will hold a 40% stake. The combination is seen to create a stronger player with a better penetration of the local marketplace.

Houlihan Lokey Capital Inc and Kirkland & Ellis LLP serve as advisors to Dex One. SuperMedia is taking counsel from Morgan Stanley & Co LLC, Chilmark Partners, Fulbright & Jaworski LLP and Cleary Gottlieb Steen & Hamilton LLP.

QROPS for USA Residents

Thousands of people make the decision to relocate to the USA from the UK every year, yet there are many who make the decision without being in possession of all the facts surrounding the taxation of their pension funds. The decision to leave the UK to enjoy retirement in a country that offers a better quality of life is often driven by the heart. However, retirees need to be absolutely certain that their pension will cover the entire length of their retirement. Leaving the UK to enjoy the latter years of life will remove the safety net of the British welfare system, and that can have devastating consequences.

Unfortunately, QROPS pension rules in the USA are more complex than in most other countries in the world, and this means that a foreign-based pension fund cannot simply be ‘plugged in’ to the American system. However, recent changes to the regulations mean that QROPS USA is now live, and there are a number of schemes that have recently been brought to the market. Several US 401K pensions have now been officially registered with Her Majesty’s Revenue and Customs (HMRC), but there are still various compatibility problems seem to originate in the USA.

Problems of incompatibility arise when USA residents have accrued their pension funds in the UK or another foreign jurisdiction. Foreign pension funds are not recognised by the American government, so contributions and investment growth may be subject to taxation from the Inland Revenue Service (IRS) in the States. The IRS has extremely stringent guidelines governing the reporting of taxation issues, so a new breed of QROPS is needed specifically for expats living in the USA. Thankfully, there are now pension products that comply with the reporting requirements of both the HMRC and the IRS.

The benefits of transferring pension funds to a QROPS pension with American compatibility are wide-ranging, but the most significant involves the protection of investment growth from US Federal Income Tax. This type of overseas pension fund will also enable people to draw a tax-free initial lump-sum of up to 30% of the fund’s value. USA residents can also be confident that their pension incomes are not subject to UK taxes, and that is an issue that can allow people to plan their financial future accurately. The advantages and benefits of QROPS USA are extensive, but both the HMRC and IRC websites contain detailed information for fund-owners.

Under the British taxation system, a 55% charge is levied on unused funds that still remain in a pension fund; however, American-compliant pension funds incur absolutely no charges. This type of pension scheme incurs no tax on funds that pay regular benefits, and funds which aren’t in drawdown are also free from taxation. A QROPS also falls outside of UK inheritance tax laws, so there really are several benefits to setting up such a pension arrangement.

 

A Qualifying Recognised Overseas Pension Scheme is open to foreigners wishing to reside in the USA, American nationals who have been working outside the USA and American nationals who currently live outside the USA. It allows retirees to take control of their finances, as they can protect their pensions from the unfair or unnecessary tax burden imposed by the country of their origin. For more information, please visit – http://www.whichoffshore.com/qrops

 

 

 

US Liberty Media walks away from deal to acquire Belgian Telenet

US cable TV company Liberty Global Inc (NASDAQ:LBTYA) said it would not prolong its offer for Belgian takeover target Telenet Group Holding NV (EBR:TNET) after the expiration deadline set for today.

In an official announcement in Belgian business dailies De Tijd and L’Echo, the US firm said that it held 58.3% of Telenet’s shares and 58.4% of its voting rights after on Monday a further 9.49m shares and 3,000 warrants were tendered to its voluntary cash offer.

Liberty, which previously owned 50.2% in Telenet, launched on 18 December a EUR1.96bn (USD2.6bn), or EUR35.00 a share, offer for the rest of the stock. The bid, to be funded with cash on hand and borrowings, could result in Telenet being delisted.

Last week, the target released a trading update ahead of schedule, saying its revenues last year had increased 8.2% to EUR1.49bn, up from analysts’ average forecast of EUR1.48bn and the company’s expectation for 7% to 8% growth.

Liberty had previously questioned the target’s growth forecasts for the period between 2012 and 2018, saying it would not lift its bid.

US banks see higher earnings on capital market activity, mortgage refinancing

Increased capital market activity drove stronger earnings and increased profitability for major US banks in the third quarter of last year, according to ratings agency Fitch Ratings.

Fitch said that strong debt issuance, tighter fixed income spreads, and an equity market rally fueled a healthy rebound in capital markets revenues from depressed levels in Q3 ’11 and subdued activity in the prior quarter.

Core profitability for the major banks was slightly improved and better than expected during the quarter.

The mortgage refinance boom further contributed to stronger revenues for the quarter. This reflects the effects of theFederal Reserve’s quantitative easing measures, which have brought long-term rates down to very low levels.

Although refinance activity will continue into 2013, Fitch expects that it will level off and thus current levels are not considered sustainable.

The larger US banks began disclosure of expected Basel III Tier I common ratios in Q3. Although this guidance is not finalized, Fitch expects that most rated banks will be in compliance ahead of full implementation.

US Treasury sells remaining AIG shares for $7.6bn

New York-based insurer American International Group, Inc. (NYSE: AIG) has announced the completion of an offering of approximately 234.2m shares of AIG common stock by the US Department of the Treasury (Treasury).

According to AIG, Treasury received proceeds of approximately USD 7.6bn from the sale. The sale of these shares the last of Treasury’s remaining shares of AIG marks thefull resolution of America’s financial support of AIG.

Since September 2008, America committed a total of USD 182.3bn in connection with stabilizing AIG during the financial crisis.

Since then, through asset sales and other actions by AIG, theFederal Reserve, and Treasury, America recovered its USD 182.3bn plus a combined positive return of USD 22.7bn.

Beginning in May 2011, Treasury successfully sold approximately 1.7bn shares of AIG common stock in six public offerings for total proceeds of approximately USD 51bn, including approximately USD 13bn purchased by AIG.

Treasury continues to hold warrants to purchase approximately 2.7m shares of AIG common stock the sale of which is expected to provide an additional positive return to taxpayers.

US economy poised for growth, but austerity threatens

According to a report from Canada-based financial services firm Toronto Dominion’s (TSX: TD) (NYSE: TD) US-based TD Bank’s TD Economics affiliate, the main obstacle standing in the path of faster US economic growth is a strong headwind blowing in from fiscal restraint.

The report said that, without fiscal drag, the US economy would be headed for a growth trajectory in the 3-4% range in 2013.

It said that the worst of the consumer deleveraging cycle and its dampening effect on economic growth appear to be over. But just as the private sector is set to provide a welcomed tailwind to the economy, it will be met with worsening cross winds from public sector restraint.

TD Economics forecasts economic growth to average 1.9% in 2013 down from an estimated 2.2% in 2012. However, by the second half of next year, clearer fiscal policy should lead to resurgence in private demand, placing the economy on a stronger footing with 3.0% growth in 2014.

With a few weeks to go before deep spending cuts and tax hikes arrive and hamper economic growth, a deal to avoid them between the White House and Congress has yet to be reached.

TD Economics estimates that if all tax hikes and spending cuts are allowed to take place as scheduled, it would cut 3.0 %age points from real GDP in 2013.

The constraint on growth posed by fiscal policy comes amid signs that housing has entered a self-sustaining recovery. Home prices have risen consistently through 2012 while delinquencies and foreclosures have fallen.

TD said that the rise in home prices has been substantial prices are up 5.0% from year-ago levels and appears sustainable. The fall in construction activity over the last several years has cleared the supply overhang and allowed rising demand to pull up prices.

The housing market has also been the focus of the Federal Reserve, whose latest round of quantitative easing has focused on purchases of mortgage-backed securities.

NBA clears acquisition of Memphis Grizzlies by Pera group

The National Basketball Association (NBA) said its governors board had given its unanimous support to the sale of the Memphis Grizzlies professional basketball franchise to a group of investors headed by businessman Robert Pera.

The agreement was signed in June between Grizzlies owner Michael Heisley and Pera’s group, without disclosing financial details.

Heisley’s company Hoops LP, which owns and operates Grizzlies, also announced the approval by the NBA to the deal, saying the transaction is expected to be wrapped up shortly. Until then, the parties will abide by the terms of the signed confidentiality agreements, Hoops explained.

Pera founded and leads as CEO California-based communications technology firm Ubiquiti Networks (NASDAQ:UBNT).

Grizzlies was initially located in Vancouver and owned by Arthur Griffiths, who also had the Vancouver Canucks hockey club. The basketball team, which joined the NBA in 1995 as an expansion team, was bought by Chicago businessman Heisley in 2000. The year after that, the new owner relocated the franchise to Tennessee. Now it plays at Memphis’ FedExForum.

The team has taken part in the playoffs in five seasons and finished fourth in the Western Conference in the 2011-2012 season.

In a statement, NBA commissioner David Stern welcomed the NBA approval for the deal, saying that the strong local ties of Pera’s group will benefit the team and the community.