Yahoo investigating if insiders knew of hack

Yahoo said in a filing it was possible that its acquisition by Verizon could be terminated or renegotiated

Yahoo said investigators into the late 2014 theft of information of at least 500 million user accounts are looking into the possibility that some people within the company knew about the security incident at the time.

Law enforcement authorities on Monday also “began sharing certain data that they indicated was provided by a hacker who claimed the information was Yahoo user account data,” the company said in a regulatory filing to the U.S. Securities and Exchange Commission. Yahoo said it would “analyze and investigate the hacker’s claim.” It isn't clear if this data is from the 2014 hack or from another breach.

Forensic experts are also investigating whether an intruder, which it believes is the same "state-sponsored actor" responsible for the security incident, "created cookies that could have enabled such intruder to bypass the need for a password to access certain users’ accounts or account information,"  according to the filing.

“An Independent Committee of the Board, advised by independent counsel and a forensic expert, is investigating, among other things, the scope of knowledge within the Company in 2014 and thereafter regarding this access...," the company said in the filing Wednesday.

A source familiar with the matter described the investigation as ongoing and said via email it wasn't yet clear "who knew what/when/what they shared to whom if at all."

The person also said that the company does not believe it is currently possible for the attackers to forge valid Yahoo Mail cookies.

Yahoo disclosed in late September that the account information was stolen in 2014 by what it described as a state-sponsored actor, though some security experts said it could have been done by a criminal hacker or group of hackers working on their own.

In late July, a hacker had claimed to have obtained certain Yahoo user data, but Yahoo was unable to  substantiate the claim after its investigation with the help of an external forensic expert, according to the filing. Yahoo found out about the 2014 hack in late August during a step-up in an ongoing investigation of its network and data security, the source said.

The user account information taken included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers, the company said. The company’s investigation so far indicates that the stolen information did not include unprotected passwords, payment card data, or bank account information, as payment card and bank data are not stored in the affected system.

“Based on the investigation to date, we do not have evidence that the state-sponsored actor is currently in or accessing the Company’s network,” Yahoo said in the filing.

The disclosure of the hack followed an announcement by Verizon Communications that it planned to acquire Yahoo's operating business for US$4.8 billion, but the communications company has said it is evaluating whether the hack had a material impact. Yahoo said in the filing that there are risks that as a result of facts relating to the security incident, Verizon may seek to terminate or renegotiate the terms of its purchase.

The company is facing 23 proposed consumer class-action lawsuits following the hack both in the U.S. and abroad. The company recorded expenses of $1 million related to the hack in the quarter ended Sept. 30.

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John Ribeiro

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