Sony Pays Out Millions In Hack Compensation

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Sony agrees £5m settlement with staff after devastating Sony Pictures hack, allegedly by North Korea

The devastating hack of Sony Pictures Entertainment late last year is going to cost the company millions of dollars – despite Sony chief Executive Kazuo Hirai insisting earlier this year that the hack did not represent a major financial impact on the company.

The hackers were identified by the FBI as being from North Korea, and they successfully disrupted the launch of the film of comedy ‘The Interview’. The movie depicted the fictional assassination of North Korean leader Kim Jong Un.

Personal information

The hackers also released the personal information of Sony staff, a number of whom subsequently sued the company.

Court-lawsuit-gavel-largeThe lawsuit argued Sony’s negligence caused the staff economic harm by forcing them to increase their credit monitoring because of the increased risk of identity theft.

Sony agreed in a US District Court in Los Angeles that it would pay up to $8m (£5.2m) for current and former staff data lost in the 2014 hacking scandal.

The settlement still needs to be approved by a judge, but proposes to pay up to $10,000 a person, capped at $2.5m, to reimburse workers for identity theft losses. It will also pay up to $1,000 for each staff member to cover the cost of credit-fraud protection services, capped at $2m. The largest tranche of money ($3.5m) has been set aside to cover legal fees.

Sony Entertainment chief executive Michael Lynton was quoted by the BBC as saying that the settlement was “an important, positive step forward in putting the cyber-attack firmly behind us”.

Korean Hack

The “blackmail” cyber-attack on Sony Pictures Entertainment took place in November 2014 and it led to the release of its film The Interview being suspended.

The hack penetrated Sony Pictures’ internal network and led to the leak of unreleased films, as well as the publication of embarrassing internal documents, including the salary details of top executives and personal information on Hollywood celebrities.

The hackers called themselves Guardians of Peace (GoP) and targeted the film because it was about an assassination plot against North Korea’s leader. The United States has officially blamed the hack on North Korea.

North Korea for its part has denied involvement in the attack, but said that the hack was a “righteous deed”. It has also threatened the West over the issue.

The hackers later threatened attacks upon cinemas who released the film, and as a result most major cinema chains declined to screen the film, forcing Sony to pull the film, a decision that Hollywood stars and President Obama condemned.

Following that, Sony released the film in a small number of independent cinemas and it was also distributed online by Sony, Microsoft, Google and Apple.

Earlier this year, a high-profile defector from North Korea, Prof Kim Heung-Kwang, warned that North Korea has a much greater cyber-attack capabilities than first thought.

He warned that North Korea spends between 10 to 20 percent of its military budget on cyber warfare capabilities, and that the country has thousands of trained military hackers

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Author: Tom Jowitt
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