Did Russian Hackers Steal $10 Million+ from Citigroup?

Parsing the Wall Street Journal's explosive cyber crime scoop

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In a story that's both alarming and controversial, The Wall Street Journal reports that a Russian cyber gang stole tens of millions of dollars from Citigroup using $40 software. The information comes from anonymous government officials who say the FBI is currently probing the computer-security breach. However, Citigroup fervently denies that any such breach or probe has occurred. Is the bank being forthright? While the Journal casts doubt on Citigroup's denial, media experts are applauding the newspaper's "fascinating scoop." At the same time, business bloggers say the attack demonstrates how vulnerable the U.S. is to cyber crime:

  • This Is Just the Beginning, writes Douglas A. McIntyre at Daily Finance: "Programmers are becoming much more sophisticated at breaking into the servers and PCs that run major websites, including those run by the U.S. government. Anti-hacker software is supposed to be well-designed and highly effective, but it appears that is not always the case. The government and businesses with sensitive information, including banks and defense contractors, are likely to be subject to more and more of these breaches, and there isn't much evidence to show that all of them can be stopped."
  • The Report Is Patently False, says Joe Petro, managing director of Citigroup's security services: "We had no breach of the system and there were no losses, no customer losses, no bank losses... Any allegation that the FBI is working a case at Citigroup involving tens of millions of losses is just not true."
  • Of Course Citigroup Denies It, write Siobhan Gorman and Evan Perez at The Wall Street Journal: "U.S. banks have generally been loath to disclose computer attacks for fear of scaring off customers. In part this is an outgrowth of an experience Citibank had in 1994, when it revealed that a Russian hacker had stolen more than $10 million from customer accounts. Competitors swooped in to try to steal the bank's largest depositors."
  • This Is Brave Journalism, applauds Ryan Chittum at The Columbia Journalism Review: "You've got to hand it to the Journal for going big with the story, which we'll assume is true. It puts the Citi denial in the fifth paragraph and just motors on...You can bet this one was one of the most heavily 'lawyered' WSJ stories in a good while. The liability for getting this one wrong would be huge, especially after a flat denial. The Journal goes into great detail here, which makes its story all the more credible...It's rare to see a story like this where the subject denies the very premise of a super-sensitive story and yet the paper goes ahead and writes it anyway. The WSJ is calling Citigroup a liar. Good for it."

This article is from the archive of our partner The Wire.