Teenager arrested in Heartbleed hacking; Bank of America reports losses over legal fees

April 16
computer security
Teenager arrested in Heartbleed hacking

A Canadian cyber-crime unit has arrested and charged a ­19-year-old Ontario man for allegedly hacking into the country’s tax agency using the Heartbleed Internet security bug.

The suspect, Stephen Arthuro Solis-Reyes, was arrested Tuesday at his home “without incident,” Royal Canadian Mounted Police officials said in a news release. Officials found and seized computer equipment from Solis-Reyes’s home.

Earlier this week, the Canada Revenue Agency said an attacker using Heartbleed stole 900 Social Security numbers. It was the first known case of a hacker taking advantage of the security flaw for malicious purposes.

The vulnerability stems from a fault in OpenSSL, a widely used security protocol that encrypts Internet traffic for vast numbers of Web sites.

— Brian Fung

Bank of America reports losses

Bank of America reported an unexpected first-quarter loss on Wednesday after it took a $6 billion charge to cover litigation expenses, a figure that far exceeded the legal settlements the No. 2 U.S. bank announced recently.

Revenue improved in many of the bank’s major businesses, but the results were overshadowed by its bigger-than-expected legal costs. The bank had previously said that a settlement would cut into its earnings by $3.7 billion before taxes.

The extra litigation expenses came from setting aside money to cover future legal settlements tied to previously disclosed mortgage-related matters, Chief Financial Officer Bruce Thompson told reporters. Still, the bank’s setting aside more money does not mean a settlement is imminent, Thompson told analysts on a separate conference call.

Bank of America’s quarterly loss, its first since the second quarter of 2011, underscores how much the bank is still suffering from its disastrous acquisition in 2008 of Countrywide Financial at the height of the financial crisis. That deal was a key factor in more than $50 billion of legal expenses the bank has logged since the financial crisis.

In March, Bank of America agreed to a $9.3 billion settlement to resolve claims that Countrywide and other Bank of America entities overstated the quality of the mortgages they sold to Fannie Mae and Freddie Mac between 2005 and 2007.

— Reuters

Also in Business

Swiss bank Credit Suisse said its net profit fell 34 percent in the first quarter, more than expected, as bond-market woes hurt earnings at its investment banking business. Profit dropped to $975 million from $1.5 billion in the same quarter a year ago. Group core revenues fell 8 percent to $7.3 billion. The bank said it saw lower revenues and earnings at its investment banking division, which faced “a challenging market environment.”

The Mt. Gox bitcoin exchange in Tokyo is headed for liquidation after the Tokyo District Court rejected its bankruptcy protection application. After Mt. Gox went offline in February, its chief executive Mark Karpeles said 850,000 bitcoins worth several hundred million dollars were unaccounted for. Later, Mt. Gox found 200,000 of the bitcoins, changing the estimate for the lost virtual currency to 650,000 bitcoins, although the exact amount is still under investigation.

IBM’s first-quarter earnings fell and revenue came in below Wall Street’s expectations amid an ongoing decline in its hardware business. IBM said it earned $2.38 billion in the ­January-March period. That’s down 21 percent from $3.03 billion a year earlier. Revenue fell 4 percent to $22.5 billion, below the $22.9 billion that analysts expected. The biggest drop was in its systems and technology unit, or hardware, where revenue tumbled 23 percent to $2.39 billion from $3.11 billion.

A Federal Reserve survey shows economic growth picking up across most of the United States over the past two months as bitter winter weather subsided. Ten of the Fed’s 12 regions reported an increase in economic activity, according to the Beige Book survey. In most places, the Fed described the improvement as “modest or moderate.” Only Cleveland and St. Louis reported slower growth. The Beige Book is based on anecdotal reports from businesses and will be considered along with other data when Fed policymakers meet April 29-30.

McLean-based Capital One reported first-quarter net income of $1.14 billion. That compares with net income of $1.04 billion in the same period of 2013. Revenue dipped 3 percent to $5.37 billion from $5.55 billion. The lender said loans fell in its U.S. credit card division and home loans dropped, too. Loans for cars and commercial real estate increased, nudging total loans up compared with the first quarter of 2013.

— From news services

Coming Today

8:30 a.m.: Weekly jobless claims.

10 a.m.: Weekly mortgage rates.

Earnings: General Electric, Goldman Sachs Group, Mattel, Morgan Stanley, PepsiCo.

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