By Matt Egan
February 06, 2014
Artwork courtesy socialmedia3307.tumblr.com
Hackers used to be content just siphoning off huge wads of cash and stealing millions of identities, but today’s cyber evildoers also want to mess with investors.
In a new report issued this week, security firm Prolexic warns that hackers are deploying distributed denial-of-service (DDoS) attacks in an attempt to manipulate stock prices or even cause market mayhem.
“We have uncovered a disturbing trend: Many of these malicious attacks appear to be intent on lowering the target’s stock price or currency values, or even temporarily preventing trades from taking place,” Stuart Scholly, president of Prolexic, said in a statement.
The complex and evolving intentions of modern hackers underscore the difficult challenge facing corporate America in combating this rising threat.
It’s clear that hackers want to take advantage of the fact that in today’s digital world, major companies need to stay online to maintain services with clients and secure their legitimacy.
Increasingly Powerful Attacks
The public image of a financial-services firm is “intricately associated with its cyber presence,” the Prolexic report said. Therefore, it stands to reason that a wobbly cyber presence can hurt that public image or even market value of a company.
In recent years, DDoS attacks are believed to have slowed or even blocked access to the customer websites of big banks like Wells Fargo (WFC) and JPMorgan Chase (JPM) and even virtual currency exchanges.
“Even though a victim enterprise might not suffer any inventory or physical loss as a result of DDoS attacks, the negative consequences associated with site availability and investor confidence may be substantial,” the report said.
Corporate websites have been slammed by increasingly powerful DDoS attacks, which seek to overwhelm servers by bombarding them with unreasonable amounts of traffic.
There was a 26.1% year-over-year increase in the number of DDoS attacks during the fourth quarter, while the average peak attack bandwidth soared 48% from the third quarter to 4.53 gigabytes per second, Prolexic said.
Cyber-Induced Selloffs?
Prolexic said it found a “causal relationship between cyber attacks and a change in the valuation of a company in a given market.”
While the paper does not present conclusive evidence demonstrating that cyber attacks bring down companies’ share prices, Prolexic does show that this is one goal hackers are striving for.
For example, hacktivist group Anonymous took credit for a 6% slide in the share price of Sony (SNE) in April 2011 following an attack on the electronic giant’s PlayStation Network.
The embarrassing and costly incident took down the network used for online gameplay for over three weeks and led to the theft of about 77 million accounts. “We’re already causing [redacted] stock to drop!!” one apparent Anonymous member said in a chat room.
In a campaign dubbed “Operation April Foolscoin,” hackers attempted to cause a major selloff in emerging crypto currency Bitcoin in the spring of 2013 by attacking Bitcoin exchange Mt. Gox.
The powerful cyber attack helped send the value of Bitcoin tumbling 22% after Mt. Gox was forced to halt trading for 12 hours.