[ISN] Hacker Cracks Site, Forces Trade Halt

From: InfoSec News (isnat_private)
Date: Fri Aug 24 2001 - 01:44:44 PDT

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    By Steve James
    August 23, 2001
    NEW YORK (Reuters) - In the latest in a spate of corporate
    cyber-invasions, a hacker broke into a paintball company's Web site
    and sent out phony financial statements Thursday, forcing the Nasdaq
    stock market to halt trading in the company's shares for more than two
    After discovering its computer security had been breached overnight,
    Brass Eagle Inc. (Nasdaq: XTRM) notified law enforcement officials,
    including the FBI, which has a special unit that investigates computer
    crimes. An FBI spokesman in Little Rock, Arkansas, said only that the
    agency was aware of the case.
    The hacker sent out misinformation about the company's finances in
    ``hundreds, if not thousands'' of e-mails, said Chief Financial
    Officer J.R. Brian Hanna.
    The attack prompted the maker, marketer and distributor of paintball
    weapons and clothing to reaffirm its earnings guidance for fiscal
    ``On the surface it appears to be a hoax,'' Hanna told Reuters by
    telephone from Bentonville, Arkansas. Asked if it appeared the attack
    was aimed at manipulating Brass Eagle's stock to gain a financial
    advantage, he said that was apparently not the motive.
    ``But after consulting with Nasdaq, we felt it was prudent to make a
    Brass Eagle said it continues to expect fiscal 2001 sales of $100
    million to $105 million and diluted earnings per share of about $1.00.
    ``Everything was fine at the close of business yesterday,'' said
    Hanna. He said the hacker had apparently entered Brass Eagle's Web
    site and sent e-mails ostensibly from the company, to addresses of
    people registered to receive company mailings.
    This could include everyone from paintball enthusiasts -- of which
    there are an estimated 7 million in the United States -- to potential
    investors and Wall Street analysts.
    A spokesman for the Nasdaq stock market declined any specific comment
    about Brass Eagle. But he said under Nasdaq rules, ``when a company
    has material news that might affect its share price, as this (case)
    would, they are required to publicize it as widely as possible.
    ``They must notify the Nasdaq usually about 10 minutes before
    (announcing the news) and we work together on the timing of the
    trading halt,'' the spokesman said.
    Trading in Brass Eagle shares was halted around 10.40 a.m. EDT
    Thursday and resumed more than two hours later. The stock closed on
    Thursday up 28 cents, at $6.24.
    Hanna said computer security was being tightened at the company, which
    employs about 150 people at a plant in Neosho, Missouri, and another
    50 in Chula Vista, California, where Brass Eagle makes masks and
    clothing for paintball -- a manhunt-like game that is also used by
    some companies to test management skills.
    The company also operates an ``X-treme'' sports facility, Challenge
    Park Extreme, in Jolliet, Illinois.
    This was just the latest case of cyber-invasion in the information
    This month, a student who issued a fake press release that triggered
    frenzied selling of shares in data storage equipment maker Emulex
    Corp. (Nasdaq: EMLX) and sent Wall Street into a panic, was sentenced
    to three years and 8 months in prison.
    And a day trader accused of posting fake press releases on the
    Internet claiming Lucent Technologies Inc. (NYSE: LU) would not meet
    earnings projections, agreed to settle civil fraud charges with
    federal securities regulators.
    Earlier this summer, hackers entered a computer system that controls
    much of the flow of electricity across California, and in Toronto, JDS
    Uniphase Corp. (JDU.TO) said a hacker broke into its Web site and
    gained access to a draft of its fourth-quarter financial results.
    Overseas, Infosys Technologies Ltd , one of India's biggest software
    companies, said one of its corporate banking Web sites was down for
    several hours after hackers broke into it.
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