Twitter’s Security Fell Short Before Hack Targeting Celebrities, Regulator Says | Technology News

NEW YORK (Reuters) – Twitter Inc suffered from cybersecurity shortfalls that enabled a “simple” hack attributed to a Florida teenager to take over the accounts of several of the world’s most famous people in July, according to a report released on Wednesday.

The report by New York’s Department of Financial Services also recommended that the largest social media companies be deemed systemically important, like some banks following the 2008 financial crisis, with a dedicated regulator monitoring their ability to combat cyberattacks and election interference.

“That Twitter was vulnerable to an unsophisticated attack shows that self-regulation is not the answer,” said Linda Lacewell, the financial services superintendent.

Twitter did not immediately respond to a request for comment. It has acknowledged that some employees were duped into sharing account credentials prior to the hack.

New York Governor Andrew Cuomo ordered a probe following the July 15 hack of celebrity Twitter accounts, in an alleged scam that stole more than $118,000 in Bitcoin.

Those whose accounts were hacked included U.S. presidential candidate Joe Biden; former President Barack Obama; billionaires Jeff Bezos, Bill Gates and Elon Musk; singer Kanye West, and his wife Kim Kardashian, the reality TV star.

Lacewell said hackers obtained log-in credentials after calling several employees, pretending to work in Twitter’s information technology department, and claiming to be responding to problems with the company’s Virtual Private Network, which had become common because employees were working from home.

“The extraordinary access the hackers obtained with this simple technique underscores Twitter’s cybersecurity vulnerability and the potential for devastating consequences,” the report said.

Twitter’s lack at the time of a chief information security officer also made the San Francisco-based company more vulnerable, the report said.

Florida prosecutors said Graham Ivan Clark was the mastermind behind the hack, and charged the 17-year-old Tampa resident as

Why Shares of 2U, Inc. Fell 18.2% in September

What happened

Shares of 2U, Inc. (NASDAQ:TWOU) fell 18.6% in the month of September, according to data from S&P Global Market Intelligence. The online education provider cooled off after the stock had run up over the first eight months of the year, like much of the technology sector. 2U did recently sell shares to the public, but that was back in August after a strong second quarter earnings report.

Additionally, the company may have suffered from some guilt-by-association after another online education rival came under scrutiny by a short-seller.

A college-aged woman take an online class  on her laptop.

Image source: Getty Images.

So what

In the second week of September, online education rival K12 (NYSE:LRN) fell after the Miami-Dade schools district cut ties with K12 after trying it out. Short-selling firm Safkhet Capital applauded the decision and called K12 an “education vulture.”

The heightened scrutiny of K12 might have affected how investors view the risk of other companies in the online education space, 2U included.

Now what

When a company trades at a relatively high valuation, ancillary or minor negative headlines can have a big effect on the stock movement. That may have been the case with 2U, which had gone up a lot this year as work and educate-from-home names skyrocketed.

Last quarter, 2U reported 35% revenue growth, but adjusting for the recent acquisition of short-course higher education company Trilogy, organic revenue growth was only 18%.

Though 2U trades at a cheap-looking 3.2 times sales when compared with other software stocks, the company still lost a whopping $312 million over the past 12 months. With Miami-Dade showing that relationships between educational institutions and online service providers may not be so “sticky” after all, investors fled high-flying online education providers for safer pastures this fall.

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