F.B.I. Investigating Twitter After It Loses Control To Hackers
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: All the major indices are lower. The Dow, as you can see has been down for the whole session. It's currently off the best part of 270 points, down just one percent. But it is a consistent down red day and that means the Dow could close lower for the first time in a week. The markets and how they're trading and the reasons why. The F.B.I. is now investigating Twitter's worst ever security breach. Russian hackers are accused of going after vaccine makers. I'll speak to Johnson & Johnson's Chief Financial Officer. And Chinese GDP is back in the black seven months from the start of the pandemic. Live from London on Thursday. It's July the 16th. I'm Richard Quest and yes, a busy day and I mean business. Good evening. We are talking a great deal about hacking tonight. In its various ways, it's become the news of the day. First with Twitter, where several top high profile celebrities and government officials found themselves hacked in Twitter's worst ever attack. The Twitter reputation is firmly on the line, and the F.B.I. is now leading the investigation. A stunning hack of high profile accounts, Joe Biden, Barack Obama, Bill Gates, Apple. Now at the best case scenario, this was a Bitcoin scam. People were asked to send Bitcoins on the promise of getting double back. On a worst case scenario, they accessed private data and direct messages. It revealed Twitter's inability to secure its own platform, which is significant, because Twitter is now an essential service for breaking news and government policy. The Twitter share price has recovered from its lows of three percent. As to what Twitter says, a social engineering attack. However, it means employees were targeted or involved and they lost control of their internal system. Donie O'Sullivan is in New York. So, first of all, I mean, what was the purpose of this? Because if it was a sort of scam revenue raising, they didn't get much, or was this something more sinister?</s>DONIE O'SULLIVAN, CNN BUSINESS REPORTER: That's the real question here, Richard. You know, if this was just a Bitcoin scam, a way to make a quick buck on cryptocurrency, you know, I think that's Twitter. That's everybody getting off really lucky. But these hackers really had the keys to the kingdom. I mean, if Biden had just got hacked, you know, his account, just one account, it would be a story of the day. We'd be talking about it right now. It's in an election year. But to have all these accounts hacked, and basically how it happened was that a Twitter employee or at least one employee was in some way compromised. Twitter is saying social engineering, which means that an employee was either tricked or bribed or convinced in some way to hand over their credentials. So meaning that Biden and Obama didn't just get hacked, Twitter actually got hacked and then that access was what allowed the hackers to do what they did. Was the Bitcoin stuff a cover for something else? We just don't know yet. Twitter has a ton of questions answer.</s>QUEST: Donie, thank you. Donie O'Sullivan. We will keep it brief. We have a shortened program tonight, Donie. Michael Coates is with me, Twitter's former Chief Information Security Officer. Michael joins me from San Francisco. This is a big problem, obviously, stating the obvious for Twitter. How there was -- this wasn't somebody hacking the person. They hacked Twitter, how did it happen?</s>MICHAEL COATES, FORMER CHIEF INFORMATION SECURITY OFFICER, TWITTER: Yes, the information we have so far really does stem around the social engineering attack, as you said, and I really do need to applaud Twitter in their transparency and speed. If you look at other data breaches that have happened, they're not reported on as quickly and you have no idea of the inside on what's happened. So it is great that they've come forward and shared what they have so far. But to that regard, yes, social engineering attack. This could be any number of techniques being used from phishing e-mails, from some sort of bribery or other -- and really targeting the internal employees. The thing to remember about this is this is a very prevalent attack method across numbers of companies, especially those platforms that have such impact on the world through their social platforms.</s>QUEST: But these platforms, Twitter has had problems in the past with an employee and Facebook has had problems with an employee. They've all recognized that you're only as strong as your weakest link, and the weakest link is often an employee. So here surely, the question will be why there weren't layers of protection? Or maybe they were, and they too, were defeated?</s>COATES: Yes, that's what we really need to get to the bottom of because while I certainly can't speak to internal controls inside the company, I can confirm there are many layers of controls. There's analysis, there's logging, there's data science analysis, minimum privilege. All of these things that you would expect in these systems. And then the question does come to mind of when all is said and done, how did this attack get through those items? I do think that based on the prominence of these platforms, that it is a continual area of more security investment. Based on the role they play in the world, we just need to keep bolstering that security to no end.</s>QUEST: Does it sound like it was private individuals or a group of private individuals or state sponsored?</s>COATES: Well, based on what we're seeing from the attack actually leveraging, you know, a Bitcoin scam. There is a question in your mind of is that really all they did with the accounts? Could there have been something more sinister? And looking at past attacks that have happened on the platform where a prominent account has been compromised? It is often just what you see. We've seen very prominent accounts be compromised just to spew vulgarities and you think well, wow, you could have done so much more with that account. Thank goodness you didn't. In this situation, the same sort of thoughts come to mind. So I do think that points to an individual where their MO is to extract money through a Bitcoin scam.</s>QUEST: Which of course begs the question why anybody would ever spend money on a get rich quick scheme that supposedly came from a famous person. But that -- but the gullibility to one side -- actually, no, the gullibility is the crucial part because if you now start hacking Donald Trump or Joe Biden and start putting false statements, serious statements, geopolitical statements, then you could be hitting gullible people with true fake news.</s>COATES: There's certainly a threat in the information that comes across those channels and the importance of protecting them. There's also the other issue of, you know, politician that choose to use those for their official press statements, which I think is another issue to be discussed. But yes, in this situation in particular, we are fortunate that it looks like a Bitcoin scam. While there was money lost from those that are gullible, it appears to be from the outside, you know, the main attack approach used here.</s>QUEST: Good to see you, sir. I appreciate it. Thank you. We'll stay with hacking at the moment. There was another major event. The U.K., the US and Canada are all accusing Russia of carrying out cyberattacks, this time on vaccine and pharmaceutical companies trying to get information and proprietary data on tests being done on COVID-19. The warning details of the activities by the group APT 29. It goes by then Cozy Bear. We've seen this a lot before. They're the same group believed to have hacked servers of the D.N.C. in 2016. Kremlin is denying any knowledge of this of course. A moment ago or two ago, I spoke to the Chief Financial Officer of Johnson & Johnson. The company had released its second quarter earnings. However, obviously, the earnings we talked about, but I was most keen to know about this hacking and whether Johnson & Johnson has never been the victim of such an attack that they knew about.</s>JOE WOLK, CHIEF INVESTMENT OFFICER, JOHNSON & JOHNSON: Cybersecurity is an investment that we've been making in an increasing rate. It's something that our management is very focused on and we have more than annual reviews with our Board of Directors on our preparedness for a cybersecurity attack. What I will say is innovation is really the lifeblood of our company, that innovation is tied from a financial perspective on the balance sheet to the intellectual property as an asset. So, we're very guarded and protective of that security.</s>QUEST: What about the vaccine? And I mean, we've talked to Paul about when it's likely to be and trials likely to take place. How much money are you actually putting into the R&D on the vaccine?</s>WOLK: Yes, so the R&D and manufacturing capacity that we're building, which is more than what we have today is going to total about $1.4 billion before investments from other parts. It's like government organizations. So BARDA here in the U.S. has agreed to $450 million of funding. We haven't received other funding at this point, but we are in very good conversations with the E.U., the Gates Foundation and other major countries to ensure that should the science bear out, and we're moving as fast as we can there responsibly, that we've got the manufacturing capacity to put as many vaccine regimens onto the market as soon as possible.</s>QUEST: You've already got the U.S. government saying we want some. You've got the E.U. saying we want some. As the money man, what is your role? What are you saying?</s>WOLK: Yes, so we've kind of taken that part of the discussion off the table. Given the urgency as you've noted, Richard, I think about the vaccine in three components. It's the science which Dr. Paul Stoffels and you have talked about on a number of occasions. It's the scale of J&J. So the clinical trials that we are running on platforms that are proven will be ranging from ages 18 to beyond age of 65, the most vulnerable population, and it will include all ethnicities. And then lastly, it's about access. And so when we identified our lead candidate on March 30th, we, at the same time announced that we would be distributing that at not for profit pricing. We have conviction. We're standing by that pledge. In fact, we're going to be very transparent as to how those costs are derived and have it audited by one of the public accounting firms that are well known.</s>QUEST: So let's be clear, because this is the first time and I'm so glad that I'm talking to you because these are issues that I can't really talk about with others, because they go to the financing -- first, J&J is saying, you know, you want to recover your costs of a coronavirus, but you're not in it to make money. Is that what you're saying?</s>WOLK: That is exactly what we're saying related to the vaccine during the emergency period -- we realize the urgency, the need across the globe, and it's important for all businesses, not just J&J businesses, for all businesses that we are part of the solution here. So that was an early commitment made by our CEO, Alex Gorsky and we stand by that today.</s>QUEST: How close are you?</s>WOLK: I would say we're moving as fast as we can 24/7. Paul Stoffels and his team have met, quite frankly exceeded every deadline that's been given to them. We will have a preclinical data published in a significant and prominent scientific journal in the coming weeks. We will start human testing next Wednesday, and we're also in discussions with the N.I.H. to see if we can start Phase 3, so measuring the efficacy of the vaccine in late September. So that's an accelerated timeline as well. Again, we're going to move very quickly, prove out the science, but we're going to do it ensuring that safety and tolerability remain of paramount importance.</s>QUEST: If I look at for example, consumer health, one would have thought that would have done okay because people were buying more disinfectants, more house products, more bathroom products, except for the skin health and beauty care because they weren't going out.</s>WOLK: It's a tale of two cities. So in over the counter medicines and oral care, where you think about germs and reducing fevers, those businesses did really well growing two to three times faster than what they grew in 2019. But the skin and beauty, if you think about people staying at home a little bit more, not using some of the cosmetic products, sun care, right? We're taking less vacations, spending less time outdoors, and that has an impact on our business. So we're very bullish about the long term for our skin health beauty unit, but that was obviously a consequence of the pandemic.</s>QUEST: The Chief Financial Officer of Johnson & Johnson. And when we come back after the break, the number of Americans filing for first claim jobless claims is stuck at 1.3 million. It's a very high number, but it does beg the question whether the situation is getting better. It's not getting -- it is worse, but after the break, we'll see just how it moves forward.