March 28, 2024

British Police Arrest Man in Hacking Case

The police in Britain arrested a 19-year-old man in connection with digital attacks on businesses and government agencies “by a single hacking group,” the Metropolitan Police said Tuesday in a statement.

The police did not name the man or the hacking organization. Suspicion immediately fell on two groups: Anonymous, a shadowy international network of computer hackers, and Lulz Security, a group that has claimed responsibility in recent weeks for attacks on the Web sites of the Central Intelligence Agency and the United States Senate as well as Sony and, on Monday, the Web site of a British agency that combats organized crime.

The arrest resulted from a joint investigation by a British cybercrime unit, local police and the Federal Bureau of Investigation into attacks on “a number of international business and intelligence agencies,” the police said, without naming specific targets.

The British police said man was being questioned in a London police station and was suspected of violating several British computer and fraud laws. After his arrest, they said, officers searched a home in Wickford, about 35 miles north of London, and turned up material that police said was under examination. They said the search was conducted late Monday night; the timing of the arrest was not made clear.

Attacks this spring on the Web sites of several companies, including Sony and Bethesda Softworks, a gaming site, exploited holes in Internet security systems that are meant to protect hundreds of thousands of private user accounts. In a letter posted last week, Lulz Security said that it planned to mount further attacks on government and corporate Web sites, and that its attacks were meant to improve privacy protections on the Web by exposing lax security.

But the letter also outlined some expanded ambitions. “Top priority is to steal and leak any classified government information,” the group wrote, adding that it was now teaming up with Anonymous. “Prime targets are banks and other high-ranking establishments.”

Lulz Security appeared to dismiss speculation that one of its hackers had been the target of the British arrest, writing in a sarcastic Twitter post that it “seems the glorious leader of LulzSec got arrested, it’s all over now . . . wait . . . we’re all still here!” Web sites that track hacking news suggested that the suspect may be a disgruntled former member of Anonymous known to live in Wickford.

Earlier this month, Spanish police announced they had arrested three men said to be the local leadership of the hacker group Anonymous in connection with attacks on the Web sites of government sites and businesses.

Those arrests came after hackers who object to legislation that would increase penalties for illegal downloads briefly brought down the Spanish Ministry of Culture’s Web site. The police said that one of the Spanish suspects had a computer server in his apartment in the northern Spanish port city of Gijón, from which the group is believed to have orchestrated its attacks.

Article source: http://www.nytimes.com/2011/06/22/world/europe/22hacking.html?partner=rss&emc=rss

Pressure to Unwind CVS Merger

The four-year-old merger of the drugstore chain and the pharmacy benefit manager is the subject of an investigation by the Federal Trade Commission and a multistate inquiry by the attorneys general of 24 states, according to earlier disclosures by CVS Caremark.

The company says it is “cooperating fully” with the inquiries. “We remain confident that our business practices and service offerings are being conducted in compliance with antitrust laws,” said Carolyn Castel, a company spokeswoman.

But on Thursday, five consumer groups wrote a letter to Jon Leibowitz, the commission’s chairman, claiming “there is strong evidence that the CVS Caremark merger has harmed consumers.”

The groups, which called for breaking up the $27 billion merger, also accused the company of using confidential patient information from Caremark, which manages prescription benefits for health plans, to steer consumers to CVS pharmacies.

The company’s practices effectively gave CVS an unfair advantage over other pharmacies, reducing competition and limiting consumer choice, according to the letter, which was signed by Community Catalyst, Consumer Federation of America, Consumers Union, the National Legislative Association on Prescription Drug Prices and U.S. Pirg.

CVS Caremark denied accusations that it had engaged in improper business practices, saying the charges were “false, unfounded and misleading.” It defended its privacy protections, saying it maintained a firewall to ensure that Caremark and CVS did not share “certain competitively sensitive information,” Ms. Castel said in an e-mail. The company did not improperly steer patients to CVS pharmacies, she said. She also said “there are no plans to split up the company.”

A spokeswoman for the F.T.C., Cecelia Prewett, confirmed that the commission had received the letter, but said it could not comment on an open investigation.

For the last several years, some consumer groups as well as independent pharmacists, who have argued that they are now at a competitive disadvantage, have been calling for regulators to review the merger. Some investors have also been frustrated by the lack of financial results from the merger, and some industry analysts are saying the company would be valued more by investors as two distinct businesses. CVS Caremark had revenue of $96.41 billion in 2010, down from $98.73 billion in 2009.

At the time of the merger, executives emphasized that the combined firm would prove itself to be more attractive to investors as well as health plans and consumers.

“The real synergy here is the top line synergy, the revenue synergy,” said Thomas M. Ryan, then chief executive of CVS, when the merger was announced. “That’s how we’re going to win this game.”

Although CVS Caremark asserts that the merger has allowed it to better serve health plans and consumers, some analysts say the pharmacy benefit management operations of Caremark have struggled to persuade customers of its additional value. The company lost nearly $5 billion in contracts with employers and health plans for 2010.

In fact, some critics of the merger say executives are running the combined company to benefit the retail operations of CVS through programs like maintenance choice, a prescription drug benefit plan that offers savings to health plans by limiting where customers can fill prescriptions to CVS stores or Caremark’s mail-order operations.

“One question is whether they are just robbing Peter to pay Paul,” said B. Kemp Dolliver, an analyst with Avondale Partners.

CVS says maintenance choice is valued by its customers because it offers a retail choice beyond programs that mandate prescription delivery by mail.

Given the lackluster performance of the stock, which has treaded water since the merger and closed Thursday at $35.61, some investors have grown restless and are pushing management to reconsider the merger.

“The pressure is currently rising on them,” said Jeffrey Jonas, who follows CVS Caremark for the Gabelli mutual funds, one of the company’s investors.

In late March, Citigroup analysts issued a report that concluded the company would be worth more as separate entities. The Citigroup analysts said any breakup would probably not occur before 2012 because of the tax advantages of waiting until the merger was at least five years old.

“They now have roughly one year to make their case,” said Adam J. Fein, who runs Pembroke Consulting, a Philadelphia firm that follows the industry. He predicted that without a clear sign that customers were beginning to be persuaded that the combination delivered better results, “the clamor to separate the business will be deafening.”

At the same time, CVS Caremark has been accused by consumer advocates of not fulfilling promises made at the time of the merger; executives said then they would erect a firewall between the CVS and Caremark businesses and would be agnostic about where consumers filled their prescriptions.

In their letter, the consumer groups charged the merged company had engaged in unfair practices that favored company-owned pharmacies, including sharing information Caremark obtained in processing prescriptions to help solicit non-CVS customers to fill their prescriptions at CVS drugstores.

The situation is one in which a pharmacy benefit manager, which manages prescription benefits, is “using the information to steer people to their own pharmacies,” said Sharon Anglin Treat, a Democratic legislator in the Maine House of Representatives, who is the executive director of the National Legislative Association on Prescription Drug Prices, a consumer group that signed the letter. “It really does appear that CVS has been unable to avoid a very significant conflict of interest.”

Mark N. Cooper, the director for research at the Consumer Federation of America, one of the groups that signed the letter, said that it was important for the F.T.C. to review the original grounds — including efficiencies, cost savings and consumer benefit — for the merger and determine whether the union had been justified. “The merger was a mistake,” he said.

CVS Caremark says the merger is helping its customers by reducing costs and improving health outcomes. “The innovative products we have introduced into the marketplace since the merger are gaining traction,” Ms. Castel said, and will “enhance shareholder value.”

The company also said it “places a high priority on protecting the privacy of its customers and plan members.” Ms. Castel said CVS Caremark used patient data internally for “appropriate purposes,” like identifying potentially adverse drug reactions.

In addition, some investors say the sharing of patient information is central to any claims by CVS Caremark that the combination of the drugstore chain and pharmacy benefit manager can better serve patients by coordinating information and reducing costs. “What some people are calling antitrust is in the customers’ favor,” Mr. Jonas said.

Article source: http://feeds.nytimes.com/click.phdo?i=739eb4b11a613ed4930c8816e6cdc9c7