Israeli Spyware Company Product Used to Hack into the Cellphones of Journalists

Hacking

It’s unclear who will control an Israeli spyware firm whose product has been used to hack into the smartphones of journalists, human rights activists, and maybe even leaders of state.

Major shareholders in a private equity group that owns the majority of NSO Group, the creator of the Pegasus spyware, are debating how to proceed. The Oregon state employee pension fund is one of, if not the largest, investors in Novalpina Capital, a private equity firm, having pledged $233 million in 2017.

Novalpina Capital is dealing with an internal feud among its founding partners as well as a bombshell study revealing that NSO Group’s spyware has been widely misused around the world.

In an email to The Associated Press on Wednesday, Oregon State Treasury spokeswoman Rachel Wray said the government is getting involved. Investors have limited influence in private equity transactions once they are finalised, according to state officials.

“I can confirm that (Oregon State) Treasury is engaging in conversations pertaining to our investment in Novalpina, consistent with our fiduciary responsibility to Oregon beneficiaries, and along with other limited partners,” Wray stated Wednesday.

The development comes amid a major feud among the three co-founders of London-based Novalpina Capital, which, according to British press reports, led to investors seeking to take control of the fund after concluding that relations between the three had deteriorated to the point where they couldn’t work together any longer.

The disagreement, according to Sky News, was about the future deployment of Novalpina’s 1 billion euro ($1.18 million) fund.

In addition to internal strife, an investigation published in July by the worldwide media consortium Forbidden Stories revealed that NSO Group clients have targeted at least 180 journalists around the world. Mexican writer Cecilio Pineda Birto was slain in 2017 a few weeks after his cellphone number appeared on a leaked list of more than 50,000 cellphone numbers, according to the Guardian.

Several world leaders, including French President Emmanuel Macron, may have been targeted by spyware capable of monitoring a cellphone’s emails and other data as well as turning on its microphone and cameras.

The NSO Group denied ever keeping a “list of future, past, or existing targets.” It labelled the Forbidden Stories report “full of erroneous assumptions and uncorroborated theories” in a second statement.

The corporation claims that it only sells to “vetted government agencies” for use against terrorists and serious criminals, and that it has no access to the data of its clients. Critics have produced evidence that the National Security Agency (NSA) is in charge of the high-tech spying.

Tobias Read, Oregon’s state treasurer and chief investment officer, “is watching and (is) worried about the reporting surrounding Novalpina and the NSO Group,” according to Wray.

Because of confidentiality rules and Oregon’s obligations as a limited partner, Wray said she can’t go into specifics about the discussions among Novalpina’s investors. Read turned down a request for an interview.

Novalpina’s first big investor was Oregon. In November 2017, two founding Novalpina Capital partners, Stephen Peel and Stefan Kowski, showed up at Oregon treasury offices in Tigard, a Portland suburb, to make a proposal to the Oregon Investment Council, which administers the state’s $90 billion pension fund.

Peel told the council, “As investors, we feel we have to be contrarian.” “We have to look for deals that other people don’t notice or don’t want to do for a variety of reasons.”

A $233 million pledge was unanimously authorised by the Oregon Investment Council. According to the most recent figures, it has contributed $65.7 million to the fund thus far. The Alaska Permanent Fund Corporation and the South Yorkshire Pensions Authority in England each put up $59 million and $33 million.

Novalpina Capital and the founders of NSO Group bought a controlling position in the company from Francisco Partners, a private equity firm in which the Oregon pension fund had previously invested.

According to the Financial Times, Novalpina’s top investors are now contemplating Berkeley Research Group as a replacement. According to the London tabloid, if the California-based global consulting business is selected, it will be given a task to recover investors’ money by selling the three companies Novalpina holds, including NSO, for the highest possible price.

A request for comment was not returned by Berkeley Research Group. According to the organization’s website, it “assists leading corporations in three critical areas: disputes and investigations, corporate finance, and performance development.”

Jennifer Thomas
Jennifer Thomas is the Co-founder and Chief Business Development Officer at Cybers Guards. Prior to that, She was responsible for leading its Cyber Security Practice and Cyber Security Operations Center, which provided managed security services.