Shodan: The most Diabolical Search Engine on the Internet

“When Internet users do not find their inquiries on Google, they think no one can find them; this is simply not true.”

This is according to John Matherly, the creator of Shodan, which is widely regarded as the scariest search engine on the Internet.

Dissimilar to Google, which crawls the Web searching for websites, Shodan navigates the Internet’s back channels. Shodan is in essence a “dark” Google, looking for the printers, webcams, serves, routers and all the other things that is connected to and makes up the broader Internet.

Shodan operates 24 hours a day, seven days a week to perpetually collect information on roughly 500 connected devices and services each month.

Users and industry professionals claim Shodan offers stunning search results even from the basic of inquiries. Seemingly countless security cameras, home automation devices, traffic lights and heating systems are connected to Internet and easy to locate through a Shodan search.

Shodan searches can find control systems for water parks, gas stations, and even a hotel wine cooler. Cyber security researchers were even able to locate command and control systems for nuclear power plants and particle accelerating cyclotrons by accessing Shodan.

What is truly impressive about Shodan’s ability to locate all of these things, and the characteristic that makes Shodan so scary is that many of the aforementioned devices have legitimate security systems built into them.

“You can access a scary amount of the Internet with a default passcode,” said HD Moore, the chief security officer of Rapid 7, which operates a private version of a database similar to Shodan for personal research purposes.

A basic search for “default password” reveals countless serves, printers and system control devices that utilize “admin” as their user name and “1234” as their password. Several other connected systems require no credentials at all; for these systems all you would need is a Web browser that is connected to them.

In a speech at last year’s Defcon cyber security conference, independent security penetration tester Dan Tentler revealed how he used Shodan to locate control systems for evaporative coolers, garage doors, and pressurized water heaters.

Tentler located a car wash that be turned on and off and a hockey rink that could be defrosted with the click of a button. A city’s entire traffic control system was found to be connected to the Internet, allowing a hacker to put it into “test mode” with a single command entry. Tentler also located a control system for a hydroelectric plant in France with turbines generating over 3 megawatts each.

“A hacker or evil person could really do some serious damage with this information and control,” Tentler said in a severe understatement.

Source: CNN

Apple Facing the Heat: Tech Giant Questioned over Tax Havens

Apple executives defended the tech giant’s tax strategy on Capitol hill today, claiming that the corporation pays one of the highest effective tax rates of any major company in the United States.

A Senate panel called the hearing to investigate what committee leader’s claims was the company’s strategy of shifting income to an Irish subsidiary to avoid paying American taxes. Apple executives claim the money resided with its international operations, including those in Ireland, and not to avoid taxes because of the growth of the company’s sales overseas.

Apple CEO Tim Cook said the tech company paid an effective tax rate of nearly 31 percent on profits it made on sales within the United States. Mr. Cook said the company paid over $6 billion in U.S. corporate taxes for the fiscal year of 2012 and expects to pay an even greater some this year.

“I am often asked if Apple still regards itself as an American company,” Cook said. “My answer will always be an emphatic yes. We are more than proud to be an American company, and equally proud of our contributions to the economy of the United States.

Cook claimed that Apple has never considered moving its headquarters outside of the United States. “It is beyond my imagination, and I have a pretty crazy imagination,” Cook said.

Carl Levin, chairman of the U.S. Senate’s Permanent Subcommittee on Investigations and John McCain both started the hearing with strong remarks of Apple’s practice of shifting income to foreign nations to avoid paying American taxes.

Levin called Apple’s practice an utter “sham,” while McCain said that the company’s claim that its use of the Irish subsidiary did not diminish its U.S. taxes is “completely false.”

“American corporations cannot continue to avoid paying their share in taxes,” said McCain. “Our armed forces units cannot afford it, and our economy cannot endure it. Moreover, the American people will not tolerate it.”

McCain asked Cook, “Can you see that there is a perception of an unfair advantage with what you do?”

In response, Cook said “honestly, I do not see it as being unfair; I am not an unfair person, and that is not who we are as a company.”

Cook claims that his company strongly supports corporate tax reform and that he was happy to testify at the hearing if it would advance the change of said reform being passed.

Source: Internal Revenue Service

Jay-Z’s Latest Venture: The World of Sports

Rap star and businessman Shawn “Jay-Z” Carter, officially became a sports agent last week, kicking off his latest venture with a superstar client—New York Yankees second baseman Robinson Cano.

Roc Nation, the entertainment business created by Jay-Z in 2008 is launching Roc Nation Sports, a management company that will team-up with Creative Artists, to represent the star baseball player and other top athletes.

Cano, who previously was represented by Scott Boras, is due to be a free agent at the of this year’s major league season, which will allow the star infielder to sign with any team in the majors. Cano is expected to be the most coveted player of this year’s free agent class, and his expected nine-figure contract means a massive payday for not only Cano himself, but also for his new agency.

Roc Nation has revolved around the music industry, managing songwriters, artists, engineers and producers; however, it is also in the business of music touring, merchandising, publishing and managing its own label, Roc-A-Fella-Records.

Jay-Z was named one of Fortune’s 50 business people of the year in 2012; the rap star turned entrepreneur recently sold his clothing line Rocawear, to Iconix for roughly $205 million.

The creation of the sports management company is not Jay-Z’s first foray into athletics; he is the current minority owner of the Brooklyn Nets.

“As a result of my love for sports, the creation of the sports management company was a natural progression to form a company where we can help premiere athletes in the same way we have been helping artists in the music industry,” said Jay-Z.

The signing with jay-Z marks an unusual setback for Cano’s former mega-agent, Scott Boras.

Boras has a reputation for being one of the most aggressive sports agents in professional athletics. This aggression often earns him and his client’s top dollar for their services.

Source: AP

Not So Sunny: SEC Charges City of South Miami with Fraud

The Securities and Exchange Commission today charged South Miami with defrauding bond investors regarding the tax-exempt financing eligibility of a mixed-use paring and retail structure being constructed in its downtown commercial area.

The SEC investigation found that the city of approximately 11,000 residents located in Miami-Dade County borrowed roughly $12 million in two pooled, conduit bond offerings through the state’s Municipal Loan Council. The city’s participation in these offerings enabled it to borrow funds at generous tax-exempt rates. The city claimed that the project was eligible for tax-exempt financing in several documents for the second offering that were trusted upon by bound counsel in generating its tax opinion.

However, the city failed to disclose that it had jeopardized the tax-exempt status of the bond offerings by illegally loaning proceeds from the first offering to a private contractor and restructuring a lease agreement before the second offering.

The city of South Miami agreed to settle the charges and keep an independent third-party consultant to oversee its procedures, policies, and internal controls for municipal bond disclosures.

“The city’s fraudulent conduct put bondholders in considerable danger of incurring substantial additional costs associated with their investments,” said Elaine Greenberg, the Chief of the SEC’s Enforcement Division of Municipal Securities and Public Pensions Unit.

According to the agency’s order, the city of South Miami sought financing to construct a public parking garage. The project ultimately become a mixed-use public parking and retail structure that was intended to be developed by a for-profit developer—South Miami was responsible for all construction costs save for the retail aspect of the structure. The city retained control over the maintenance and operation of the garage portion and all revenues generated from parking. The developer’s limited role was pivotal to the city procuring the benefits of tax-exempt financing. Under IRS rules and regulations, the project was allowed to be financed on a tax-exempt basis only if the for-profit developer used it on a limited basis.

According to the agency’s order, the city approved financing for the construction of the tax-exempt portion of the building and moved ahead with its bond pool offering. However, the bond counsel identified a tax issue with the mixed-public retail aspect of the project, and during subsequent conference calls, bound counsel informed the city that no funds from the offering could be utilized to finance the retail aspect of the structure.

The SEC found that city finance directors were unaware of these discussions or how the lease contact affected the bond’s tax status.

Source: sec.gov

Axed: J.C. Penney CEO Shown the Door

The Ron Johnson tenure at J.C. Penney is official over.

The troubled department store announced late yesterday that Johnson is stepping down as CEO and leaving the company after just 18 months at the helm. Johnson is being replaced by his predecessor, Mike Ullman, who led the corporation for seven years prior to Johnson’s hiring.

J.C. Penney announced that Johnson’s departure is not the result of a conflict or disagreement with the Board of Directors or the company itself on any matter relating to operation, practices or policies.

J.C. Penney char Thomas Engibous said via a statement that the company is fortunate to have new CEO Mike Ullman take the reins at the distressed retailer.

Ullman said in a statement that J.C. Penney has traversed through choppy waters, but that the store remains a leader in American retailing and is an asset the can be leveraged and built upon.

J.C. Penney shares surged following the news of Johnson’s departure, but dropped off after it was announced that Ullman would replace him. Ultimately the stock dipped 7 percent by Monday night.

“The selection of Mike Ullman, puzzled a lot of people,” said William Frohnhoefer, an analyst with BTIG, noting that Johnson’s hiring two years ago was viewed as an attempt to change course following Ullman’s tenure.

J.C. Penney shares have dropped more than 50 percent over the past year as Johnson, a former Apple executive struggled to drive a turnaround effort.

Johnson offered a series of new initiatives, including redesigned store layouts, overhauled prices, and even free haircuts for children, in an effort to revitalize the company. Johnson ditched older brands and announced plans to terminate checkout counters in favor of self-checkout lanes and mobile devices.

“Johnson tried to do too much too soon,” Frohnhoefer claimed. “Johnson had a slew of radical and bold ideas, and he attempted to execute them all at once.”

Johnson received a compensation package worth nearly $54 million for 2011, $53 million of which came as a special stock award. Johnson earned roughly $2 million in 2012, receiving only 44 percent of his target cash compensation in light of the company’s poor performance.

New CEO Mike Ullman is scheduled to receive an annual base salary of $1 million, J.C. Penney announced on Monday.

Ben Bernake Warns against Raising Interest Rates too soon

Federal Reserve Chairman Ben Bernanke warned the American public of the risks associated with raising interest rates too soon. Mr. Bernanke also urged the U.S. Congress to do more to help the economy.

The United States’ economy is doing far better than it was a year ago, but Bernanke wants to be cautious not to squash the recovery now.

“A premature tightening of our monetary policy could cause interest rates to rise temporarily, but it would also carry a significant risk of slowing or ending our economy recovery and causing inflation to drop further,” Bernanke told the U.S. Congressional Joint Economic Committee on Wednesday.

The Federal Reserve has maintained its fundamental short-term interest rate close to zero since December of 2008, and expects rates to stay at this level there for a “considerable amount of time” as the recovery continues to strengthen, Bernanke said.

The Fed is also engaged in a controversial stimulus practice known as quantitative easing, where the central bank purchases $85 billion a month in Treasury bonds and mortgage-backed securities. This policy is meant to reduce long-term interest rates to stimulate the economy through a variety of avenues.

Low mortgage rates, for example, have played a vital role in the housing recovery, enabling some homeowners to refinance or provide an incentive to prospective buyers to purchase a home.

The housing recovery has provided a significant boost to the construction and real estate employment markets; since 2011, these industries have added roughly 420,000 jobs, according to the Federal Bureau of Labor Statistics.

That said, it is unclear how effective the policy has been in boosting the overall labor market. The economy lost roughly 8.7 million jobs following the financial crisis, and has since gained only about 6.2 million jobs back.

As of last month, the unemployment rate was 7.5 percent, which is an improvement from the peak of 10% during the crisis, but still well below the pre-recession level.

Bernanke cited his concerns about not just the labor market, but also underemployment—roughly 8 million Americans are working part-time even though they are willing to engage in full-time work.

Meanwhile, the policy is widely credited for boosting stocks to record highs.

The Federal Reserve is aiming to keep short-term interest rates close to zero until the unemployment rate dips back to 6.5 percent or inflation exceeds 2.5 percent per year. By the central bank’s own forecasts, this scenario is not likely to happen until at least 2015.

Source: whitehouse.gov

Another One Bites the Dust: IRS Official Lois Lerner Placed on Administrative Leave

The official of the Internal Revenue Service responsible for overseeing the unit that targeted conservative groups for a number of years starting in the spring of 2010 has been placed on administrative leave, according to a statement released by both the Republican and Democratic parties.

Mrs. Lerner was the director of exempt organizations when the Internal Revenue Service filtered applications for tax exempt status for words such as “tea party” and “patriot.”

Mrs. Lerner publicly revealed the targeting two weeks ago when she gave an answer to a planted question at a bar association event in Washington shortly prior to the issuing of an inspector general report that made the issue a public matter.

The Internal Revenue Service’s new acting director announced late today that he would be appointing Ken Corbin to oversee the exempt organizations unit. Mr. Corbin was previously a part of the agency as a deputy director of a department that processes payments and tax returns.

Lerner appeared before the House Oversight Committee earlier this week and stated she had not broken any of the agency’s regulations or laws of the United States. Mrs. Lerner then invoked her Fifth Amendment right against self-incrimination and refused to answer any questions.

Members of the Republican Party questioned whether Lerner had waived that right by issuing her opening statement. Committee Chairmen Darrel Issa will call Mrs. Lerner back to testify before the committee, his spokesman said in a statement released earlier today.

Lerner was made aware of the scandal in June of 2011, according to a report by the agency’s inspector general. Lerner ordered agents of the IRS to scrap the criteria, but later they expanded to include groups that promoted the Bill of Rights and the Constitution.

The singling out finally halted this month, when top agency officials claimed they found out and ordered agents to adopt legitimate criteria for determining whether tax-exempt groups were overly political.

Source: IRS.gov

Not as bad as we thought: Obamacare Premiums in California Lower than Expected

Health insurance providers in the state of California will charge an average of $304 a month for the silver-level coverage (the least expensive plan) in state-based exchanges starting next year. That said, many residents will pay far less than this figure for coverage.

Rates for Obamacare plans will vary by region, level of coverage, and age; the majority of low-income California residents will qualify for federal subsidies that will further lower premiums. The plans will be provided in four tiers, ranging from bronze to platinum. The bronze plan will charge lower premiums, but will carry increased out-of-pocket benefits, and the platinum plan will have the highest premiums but the cheapest out-of-pocket costs.

Federal subsidies will be based on the cost of silver plans and will be provided to those earning up to 400 percent of the poverty line, which comes out to approximately $45,000 for an individual and $92,000 for a family of four.

State-based exchanges will open for enrollment in October of this year, while coverage under Obamacare will start in January.

Multiple plans from insurance providers including Blue Cross Blue Shield will be available based on region. However, other large providers, including UnitedHealth declined to participate in the program.

The least costly silver plan for a young person will cost around $215 a month, but those regarded as low income (earning 150 percent of the poverty line) may only be required to pay $44 after procuring federal subsidies. The same plan for middle-aged individuals will cost roughly $275 a month and approximately $40 after the subsidies kick in.

States are beginning to unveil details of their plans; however, California has provided the most detail in describing its plans.

“Several Americans will see rates similar to what they are paying now, and in many cases, far lower and with better benefits,” said the Washington Insurance Department in a blog posting. “We are definitely not seeing the significant rate increases that some insurance providers had predicted.”

Source: whitehouse.gov

SEC Charges Dallas-Based Trader with Front Running

See You Later: Lululemon Executive Axed After See-Thru Yoga Pant Fiasco

Lululemon, the maker of yoga clothing, announced that its chief product executive was let go after last month’s see-through yoga pants debacle.

The Vancouver-based clothing company announced on Wednesday that Sheree Waterson, Lululemon’s chief product officer will step down on the 15th of this month after five successful years with the company.

Waterson’s removal comes quickly on the heels of the company’s considerable recall of Lululemon’s popular black yoga pants in March of this year. Waterson’s removal is directly related to the botched production of the pants; as a result of the blunder, the company was required to recall the entire line of black, stretchy yoga pants that had an unacceptable level of sheerness. The pants hit the market with a sales price between $72 and $98.

The popular yoga pants were recalled because they were unintentionally see-through. The defective pants represented nearly 18 percent of all women’s yoga pants sold in the company’s store and prompted a severe shortage of the product.

Last month, Lululemon announced that the recall would significantly disrupt the company’s operations and ultimately damage its financial results. As a result of the defective production of the popular pants, the company expects first-quarter same-store sales to rise 5 to 8 percent in the first quarter, which is a significant drop from its earlier forecasts of an 11 percent gain. In total, the production mistake is expected to cost the company around $65 to $75 million.

The company offered full refunds to individuals who purchased the pants. As a result of the botched production effort, shares of Lululemon plummeted, and the brand has not announced when the pants will be placed on shelves again.