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Monday, February 27, 2012
Global Intelligence Corporation Hacked by Anonymous and Exposed by Wikileaks
WikiLeaks has set its sights on Stratfor because it represents the most corrupt and threatening aspects of the out of control national security state--that former US intelligence officials run a company specializing in monetizing supposedly secret intelligence that only they have access to--thanks to their ties with current high-level members of governments around the world. The emails WikiLeaks has released in the first day of publication alone prove that Stratfor gains a significant amount of its intelligence from bribes paid to sources. This revelation should be enough to pressure the Department of Justice into opening an investigation into the relationships between private intelligence corporations like Stratfor and their sources within the US government.
The glaring rhetorical question now is, what is more criminal: the leaking of thousands of classified state department cables for the purpose of shining a light on wrongdoing and corruption; or the leaking of classified information by government officials to a private company whose intentions for that information are most likely unknown to its source?
WikiLeaks released more than 5 million e-mails Monday hacked from U.S.-based global intelligence firm Strategy Forecasting Inc. (Stratfor), revealing an alleged plan between the firm's CEO and a Goldman Sachs executive to set up an investment fund that would rely on inside information gathered by the company.
A September 2011 company-wide e-mail composed by Stratfor CEO George Friedman implicates Goldman Sachs financial adviser and former Managing Director Shea Morenz's direct involvement in the establishment of the investment fund StratCap.
"Shea Morenz provided us with two opportunities," wrote Friedman.
"First, he made an investment in Stratfor designed to give us the capital needed to build our staff and our marketing. Second, he proposed a new venture, StratCap, which would allow us to utilize the intelligence we were gathering about the world in a new but related venue -- an investment fund. Where we had previously advised other hedge funds. We would now have our own, itself fully funded by Shea."
Morenz recently joined the board of directors at Stratfor and has been named CEO of StratCap, due to launch in early spring of 2012. The investment fund was set up offshore and made to appear legally independent from U.S.-based Stratfor, but the distinction is but a formality.
"Do not think of StratCap as an outside organization," wrote Friedman in the same e-mail.
"It will be integral to Stratfor, in the sense that much of the intelligence we are developing is useful to Stratcap as well as Stratfor. The organizational and legal distinctions are real and important, but StratCap is linked to Stratfor intellectually and contractually. It will be useful to you if, for the sake of convenience, you think of it as another aspect of Stratfor and Shea as another executive in Stratfor."
Stratfor released a statement Monday, according to Reuters, saying some of the leaked e-mails "may be forged or altered to include inaccuracies; some may be authentic."
"We will not validate either," the statement read. "Nor will we explain the thinking that went into them. Having had our property stolen, we will not be victimized twice by submitting to questioning about them."
The company, established by Friedman in 1996 in Austin, Texas, provides a subscriber-based global intelligence service, including information relating to national security and geopolitical analyses of economic markets, much of it gathered through its international network of agents -- in essence, a private sector analog of the CIA.
Insider Trading and the Law
That StratCap is an investment arm of Stratfor in all but name is not necessarily a legal transgression in and of itself.
John C. Coates, Professor of Law and Economics at Harvard, explained that laws governing insider trading do not proscribe a company, whether or not it is a subsidiary of another, from making investments based on market information obtained through another company, so long as the information itself does not violate insider trading statutes.
What a company cannot do is trade based on confidential information -- surreptitiously obtained, by definition -- that could affect the value of the shares it is trading.
In short, StratCap's formal appearance of separation from Stratfor would ultimately not protect it from prosecution under insider trading laws if it were to engage in such activity.
UC Berkeley Law Professor Eric Talley said that setting up StratCap as a separate legal entity serves primarily as a buffer for Statfor against liability should StratCap go bankrupt. Talley added that StratCap could theoretically claim plausible deniability, if it traded on confidential information provided to it by Stratfor, but that such an argument would not likely hold up in court.
There is no information yet that confirms StratCap had intended to engage in insider trading, though it would be getting privileged access to information gathered by Stratfor without having to inform the company's shareholders about its investments. Talley said this opens up a legal gray area that is conducive to insider trading, but not directly engaged in the practice.
Having been prematurely exposed before its expected launch, it is not clear if the StratCap venture is operating at present.
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Morenz, who left Goldman's Austin office last year and joined Stratfor's board of directors, is said to have invested more than $4 million in Stratcap, according to e-mails related to the deal published by WikiLeaks. StratCap was set to launch in 2012 as a "captive strategic investment fund," although there is some question given the content of the e-mails whether Stratfor sought to have Stratcap appear to be independent.
With one exception, the lawyers whose names appear on the various e-mails related to StratCap—Willkie Farr corporate partner Bruce Herzog in New York, Jackson Walker associate Cale McDowell in Austin, and former Fulbright & Jaworski partner Steve Feldhaus in Washington, D.C.— did not respond to requests for comment on the transaction.
Jackson Walker corporate partner Bradley Knippa in Austin replied by referring us to an extensive response to the Wikileaks e-mail dump provided to The Am Law Daily and other media outlets by Stratfor, to whom Feldhaus had forwarded our request for comment.
Anonymous was able to steal $1 Million from Stratfor's clients, because Stratfor, a private security company failed to encrypt their client's information.
Dec. 27 (Bloomberg) -- Richard Falkenrath, a principal at the Chertoff Group and a Bloomberg Television contributing editor, talks about a cyber attack on security-analysis firm Stratfor by hackers claiming to be associated with the group Anonymous.
Current Status of Wikileaks
The Swedish Foreign Minister Carl Bildt has repeatedly attacked WikiLeaks this week in a bizarre manner
(NEW YORK) - An extrajudicial blockade imposed by VISA, MasterCard, PayPal, Bank of America, and Western Union that is designed to destroy WikiLeaks has been in place since December 2010. The EU Commission is considering whether it will open a formal investigation, but two lawsuits have been filed (http://wikileaks.org/Banking-Blocka...). There are also other ways to donate (https://shop.wikileaks.org/donate). It is legal to donate, including in the United States. The US Treasury has publicly stated that that there are no grounds to place WikiLeaks on a US government blacklist.
WikiLeaks Founder and Publisher Julian Assange has not been charged with any crime in any country. Four prosecutors are currently trying to charge him under the Espionage Act of 1917 before a closed Grand Jury in Virginia, in the United States. Julian Assange has been detained for 447 days (10,728 hours) since Dec 7, 2010, without charge, and he is currently awaiting a decision from the UK Supreme Court on extradition to Sweden (http://www.justiceforassange.com/Su...). The decision is expected in March. The decision on whether he will be onwardly extradited to the US lies in the hands of the Swedish Executive, but Sweden’s Prime Minister Fredrik Reinfeldt has refused to state whether he will protect Assange from a politically motivated extradition to the United States (http://justice4assange.com/US-Extra... ).
The Swedish Foreign Minister Carl Bildt has repeatedly attacked WikiLeaks this week in a bizarre manner (http://ferrada-noli.blogspot.com/20... ).
An alleged WikiLeaks US military source, Bradley Manning, has been in pre-trial detention for 639 days (http://bradleymanning.org/ ). His arraignment took place on 24 February 2012. In December 2011, Manning’s attorney revealed in the preliminary hearing that the US government is attempting to enter a plea deal with Manning in order to "go after" Assange. Manning has 22 charges against him, including violating the Espionage Act of 1917 and aiding the enemy. Manning has deferred entering a plea. Julian Assange and WikiLeaks are legally represented in the Manning hearings by the US Centre for Constitutional Rights (http://ccrjustice.org/ ). WikiLeaks was denied full access to Manning’s hearing after appeal (http://ccrjustice.org/newsroom/pres... ). WikiLeaks put out a statement relating to Manning’s trial ahead of the Article 32 Hearing :
The alleged WikiLeaks-supporting hacktivists known as the "PayPal 14" were arrested in 2011 following co-ordinated online demonstrations against the financial services companies that are carrying out the unlawful financial blockade on WikiLeaks (VISA, MasterCard, Paypal, Western Union, Bank of America). They are represented by attorney Stanley Cohen and will go before court in May 2012 (http://www.cyberguerrilla.org/?p=4644 ).
WikiLeaks is about to launch a distributed, encrypted "Facebook for revolutionaries" (https://wlfriends.org/ ).
Julian Assange is currently directing interviews, from house arrest, for a programme on the future of the world that is syndicated to various broadcasters. The first show will be broadcast in March (http://www.wikileaks.org/New-Assang... )
The Complete Press Conference of Julian Assange of Wikileaks announcing the release of Stratfor emails.
Public partners in the investigation:
More than 25 media partners (others will be disclosed after their first publication):
Al Akhbar – Lebanon – http://english.al-akhbar.com/
Al Masry Al Youm – Egypt – http://www.almasry-alyoum.com/
Bivol – Bulgaria – http://bivol.bg/
CIPER – Chile – http://ciperchile.cl/
Dawn Media – Pakistan – http://www.dawn.com/
L’Espresso – Italy – http://espresso.repubblica.it/
La Repubblica – Italy – http://www.repubblica.it/
La Jornada – Mexico – www.jornada.unam.mx/
La Nacion – Costa Rica – http://www.nacion.com/
Malaysia Today – Malaysia – http://www.malaysia-today.net/
McClatchy – United States – http://www.mcclatchy.com/
Nawaat – Tunisia – http://nawaat.org/
NDR/ARD – Germany – http://www.ndr.de/
Owni – France – http://owni.fr/
Pagina 12 – Argentina – http://www.pagina12.com.ar/
Plaza Publica – Guatemala – http://plazapublica.com.gt/
Publico.es – Spain – http://www.publico.es/
Rolling Stone – United States – http://www.rollingstone.com/
Russia Reporter – Russia – http://rusrep.ru/
Ta Nea – Greece –- http://www.tanea.gr/
Taraf – Turkey – http://www.taraf.com.tr/
The Hindu – India – http://www.thehindu.com/
The Yes Men – Bhopal Activists – Global http://theyesmen.org/
Nicky Hager for NZ Herald – New Zealand – http://www.nzherald.co.nz/
They have also included a PDF (embedded below) for those wishing to read the findings with a glossary of terms and codes used by Stratfor in their emails.
Folks, this is a breaking world wide news story, and many details may change.