Training Corporate Security Teams in The Event of Cyber Attack

(qlmbusinessnews.com via bloomberg.com – – Thu, 24 Nov, 2016) London, Uk – –

Computers
Longmont/flickr.com

Despite billions of dollars invested in antihacking technology over the past 10 years, companies appear to have little idea of how to respond to a cyber attack. When Target was hacked during the busy 2013 Christmas season, investigators found the company had missed early warnings that might have prevented the loss of data belonging to 70 million customers. When the news came out, lawsuits were filed, and Chief Executive Officer Gregg Steinhafel resigned. Sony Pictures Entertainment’s fumbling response a year later to North Korean hackers turned a bad situation into a terrible one, costing Amy Pascal, one of the most powerful women in Hollywood, her job as co-chairman.

IBM, which has spent five years buying companies to make itself the world's third-largest cybersecurity provider, wants to train corporate security teams, CEOs, and PR departments to handle those kinds of crises. Shortly after Election Day, the company unveiled a facility that combines gaming techniques and millions of dollars of sophisticated hardware to re-create scenarios like Target’s and Sony’s in white-knuckle, stock-plunging detail.

The idea is borrowed from the Pentagon, which uses a similar approach to train soldiers for cyberwar. Instead of the pressure of combat, the facility at IBM’s security division headquarters on the Charles River in Cambridge, Mass., wants to re-create a postbreach pressure cooker that can move rapidly from a regulatory investigation to a call from the FBI to whatever else the range’s multimedia producers can conjure. “We don’t want to scare the crap out of people,” says Caleb Barlow, vice president of IBM Security. “We do want people to feel a little of the adrenaline burst and the pressure.”

By the time IBM’s cyber range is fully operational in January, it will offer 12 training programs. Think of them as plays, Barlow says, with settings, acts, and an unusually wide range of actors, including general counsels, marketing teams, and C-suite executives.

The staging area is a bit like a flight simulator built for two dozen. Theater-quality video panels cover the front wall, and the ceiling is studded with the same sensors that allowed Tom Cruise to manipulate data with his hands in the movie Minority Report. (The ceiling array, made by Oblong Industries in Los Angeles, is the most expensive thing in the room.) Racks of servers located a floor below simulate the data stream of a full-size corporate network.

During a recent afternoon demo, the training program began with a phishing e-mail sent to a fictitious HR rep. The hackers made off with a cache of data before the IT crew could isolate the source of the breach. Then an insider leaked news of the breach, and the pressure mounted. The U.S. Securities and Exchange Commission initiated an investigation. More pressure.
As the afternoon wore on, events spun out of control. The security team discovered that the hackers hadn’t just stolen information, they’d also altered the company’s financial data shortly before its quarterly earnings report. Uh-oh.

$200 million: IBM spending on its cyber range and teams for intel and incident response

All this realism doesn’t come without risks. The range is designed to test out some of the most virulent malware, so the whole thing is air-gapped, which means it’s not connected to the real internet. Instead, developers collected data from thousands of web pages to create a miniature, self-contained internet.

Like many of the range’s features, that idea came from Joe Provost, the project’s threat modeling and simulation architect and a former master hacker for the National Security Agency. Two days after hackers took some of the world’s most popular websites offline in October with a botnet of infected home routers, TVs, and other internet-connected devices, Provost figured out how to replicate the attack so he could add it to one of the range’s scenarios. In the simulations, he also plays the main bad guy.
The facility is expensive, and IBM wouldn’t say exactly how much it costs to run. Barlow says the company had spent a combined $200 million on the range and the development of cyber intelligence and incident response teams for on-site investigations of major hacks. He may be reticent to break out spending on the facility, because there’s no guarantee the investment will pay off. IBM says it’s not planning to charge people who come in for the training sessions; it’s more of a marketing tool, an effort to convince companies there’s enough value in IBM’s various cybersecurity technologies to make them worth buying. “This is in some ways a grand experiment,” Barlow says.

Roland Cloutier, chief security officer of payroll-services provider ADP, says that based on what he knows of the gaps in traditional cybersecurity training, IBM’s plan should work. “What IBM has been able to do is take two very different processes and combine them into a single training,” he says. “One is technology-based—I have an attack going on, and I have to stop it. But then you have crisis management, which is about leadership in tough situations. That’s a whole different skill set.”

The bottom line: IBM has built a cybersecurity training center to test corporate readiness. Now it has to persuade customers to buy its gear.

By Michael Riley

(Updated second paragraph to correct IBM’s global market position.)

Chancellor Philip Hammond Delivers Britain’s Autumn Statement

In his first Autumn Statement to Parliament Wednesday, U.K. Chancellor of the Exchequer Philip Hammond will outline a series of measures to help “ordinary working-class families” and stress that a stable economy, fiscal discipline and better productivity are the best ways to raise living standards. Watch the address live right here on YouTube.

Chancellor £1.4bn funding injection to help thousands of families buy a home

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 23 Nov, 2016) London, Uk – –

Construction
Omar Bárcena/flickr.com

Housebuilders will receive a major boost in the Autumn Statement today as the Government steps up its affordable housing drive to help address a chronic shortage.

Philip Hammond will use his first fiscal statement since becoming Chancellor to announce a £1.4bn funding injection to help thousands more families to buy a home.

It came as a jump in corporation tax receipts helped to reduce public borrowing last month to its lowest since 2008, handing a boost to Mr Hammond on the eve of the Autumn Statement.

Higher national insurance, VAT and a 24pc jump in corporation tax revenues pushed down public sector net borrowing, excluding public sector banks, to £4.8bn in October, down from £6.4bn a year ago.

This is the lowest October deficit since 2008, according to the Office for National Statistics (ONS), and well below economists’ estimates for a fall to £6bn.

The Chancellor will announce measures today to help renters and aspiring homeowners as part of a pledge by Theresa May, the Prime Minister, to ensure the economy “works for everyone”.

The Government estimates that 40,000 new homes will be built as a result of the funding injection, which will be used to help first-time buyers, existing shared owners who wish to move and former homeowners who can no longer afford to buy.

Mr Hammond will abandon the rigid framework set by the current Affordable Homes Programme, with the £4.3bn of current and £1.4bn of additional funding allocated “flexibly” between existing shared ownership and affordable rent schemes.

Previous plans indicated that 88pc of funds would be used to build at least 135,000 homes for shared ownership, which are targeted at families with incomes of £80,000 or less, or £90,000 in London.

Around 10,000 homes were expected to be built under the Rent to Buy scheme, where prospective buyers pay a discounted rent for five years while saving for a deposit.

Allocations will now depend on demand from local authorities and housebuilders.

The Chancellor’s announcement will be part of a package designed to help people’s money go further and boost living standards as the UK prepares to leave the European Union.

A modest infrastructure boost will be announced alongside a warning from the Government’s independent fiscal watchdog that slower growth due to the Brexit vote will reduce tax receipts and force up borrowing over the next five years to plug the gap between revenues and expenditure.
The Government has borrowed £48.6bn so far this financial year, according to ONS data.

While this is £5.6bn less than a year ago, the Office for Budget Responsibility (OBR), warned last month that the current borrowing target of £55.5bn for this fiscal year was “very unlikely to be met”.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, expects borrowing for the current financial year to be revised up by around £10bn.

Mr Hammond has already abandoned a goal to balance the books by the end of the decade and some economists believe the hit to the public finances could be as large as £100bn over the next five years.

The Chancellor will present new borrowing rules in the Autumn Statement that will give the Government flexibility to respond to fiscal shocks.

A spokesman for the Treasury said Mr Hammond remained “committed to fiscal discipline” and would “return the budget to balance over a sensible period of time”.

Separate data published by the Confederation of British Industry showed factory bosses reported their healthiest order books in November since before the Brexit vote.

Britain’s biggest business group said manufacturers were at their most optimistic about the near-term outlook in nearly two years.

However, its monthly survey showed many were poised to raise prices at the fastest pace in almost three years, reflecting the sharp fall in the value of the pound since the EU referendum result.

By Szu Ping Chan

October borrowing 25 percent less lowest since 2008 beating all economists’ forecasts.

(qlmbusinessnews.com via uk.reuters.com – – Tue, 22 Nov, 2016) London, UK – –

Economy
UK in Spain/flickr.com

British finance minister Philip Hammond got some rare good news about the country's finances on Tuesday as he finalises his first budget statement, which is still likely to forecast a surge in borrowing as Britain prepares to leave the EU.

Breaking with a pattern of borrowing overshoots earlier in the financial year, official figures on Tuesday showed public borrowing in October was 25 percent less than a year earlier at 4.8 billion pounds ($6.0 billion), its lowest since 2008 and beating all economists' forecasts.

But Hammond still stands little chance of meeting the budget deficit reduction target for the current financial year which his predecessor, George Osborne, set out in March. He has already abandoned Osborne's goal of reaching a budget surplus by 2020.

Instead, economists predict Hammond could announce more than 100 billion pounds of extra borrowing on Wednesday, as Britain's independent budget office is likely to forecast slower growth, weaker tax revenues and higher social security costs in the wake of June's vote to leave the European Union.

“To put it bluntly, Brexit will be assumed to make the UK poorer which means the government must eventually lower spending, raise taxes, or permanently borrow more,” Bank of America Merrill Lynch economist Robert Wood said.

Hammond played down expectations of much extra spending on public services or infrastructure to cushion the effect of years of uncertainty as Britain negotiates to leave the EU on Sunday, and described debt levels as “eye-wateringly” high.

Britain's Chancellor of the Exchequer Philip Hammond arrives at 10 Downing Street in London, November 2, 2016. REUTERS/Toby Melville/File Photo

Bank of America's Wood said he expected Hammond to announce extra discretionary stimulus that amounted to just 0.5 percent of gross domestic product, in part because he may want to keep his powder dry in case of a sharper economic slowdown.

This could include freezes to taxes on vehicle fuel and air travel, and modest further investment in infrastructure such as roads and broadband internet connections.

Britain's economy has slowed much less than most economists forecast since the Brexit referendum, and on Tuesday the Confederation of British Industry reported the fastest growth in factory orders since the June 23 vote.

But analysts see tougher times ahead for households as a 15 percent fall in the value of sterling against the dollar feeds into higher prices.

The public finances were underperforming even before the Brexit vote. Borrowing since the start of the tax year in April is 10 percent lower than in the same period of 2015 at 48.6 billion pounds, the Office for National Statistics said, versus a 27 percent fall needed to meet Osborne's 55 billion pound target for the whole tax year.

“The government is committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows space to support the economy as needed,” a finance ministry spokesman said after Tuesday's data.

Britain's budget deficit was 4 percent of GDP last year, down from 10 percent at the height of the financial crisis but still more than almost all other big economies.

The ONS said net public debt rose to a record 1.642 trillion pounds in October, equivalent to 83.8 percent of gross domestic product.

October's improvement in the public finances was driven by faster growth in tax revenues. Overall these were up 6.8 percent on the year, with particularly strong growth in corporation tax. The ONS was not able to say if the trend was likely to last.

By David Milliken and Andy Bruce

Facebook to open new UK headquarters in London hiring 500 new staff

(qlmbusinessnews.com via uk.reuters.com – – Mon, 21 Nov, 2016) London, UK – –

Facebook (FB.O) said it would expand its presence in Britain by 50 percent in 2017, joining other U.S. technology firms in increasing investment despite the uncertainty sparked by the country's vote to leave the European Union.

The social network firm said it would hire 500 new staff, adding to the 1,000 people it already employs in Britain, as Facebook gears up to open a new UK headquarters in London next year, following other firms drawn by talent and a thriving tech start-up scene.

Before the Brexit referendum in June, campaigners in favour of remaining in the EU had warned that international companies could seek to reduce their presence in Britain as a withdrawal from the bloc would make it a less attractive place to invest.

Some big banks such as Goldman Sachs (GS.N) and Citi (C.N), which employ many thousands in London's financial centre, are said to be considering shifting some jobs elsewhere in Europe as a result of Brexit, a worry for the British economy where financial services account for around 10 percent of output and provide some of the best paying jobs.

Facebook's UK expansion comes after Google (GOOGL.O), owned by parent company Alphabet Inc, said earlier in November that it would invest an estimated 1 billion pounds, and make 3,000 new hires in the Britain.

“The UK is definitely one of the very best places to be a technology company,” Facebook vice-president of Europe, Middle East and Africa Nicola Mendelsohn said at a conference run by the CBI, an employers group, adding that it was too early to say what Brexit would mean for the movement of labour.

“The movement of talent is something…that matters to us.” she said, adding that Facebook employs people of 65 different nationalities in Britain.

Facebook opened its first engineering office outside the U.S. in London in 2012 and has been growing rapidly in the UK since. Its main UK operating unit's staffing increased by 90 percent in 2015 from 2014, according to its latest accounts, with more than half of those hired engineers.

It also employs hundreds of sales and marketing staff who tend to focus on larger clients or running regional teams, according to Facebook job ads and linkedIN profiles of staff.

Amazon (AMZN.O), which created 3,500 UK jobs in 2016 at its head office, research and development centres, customer service centres and distribution depots, plans a further 2,300 jobs at three new distribution centres in 2017.

AMAZING ECOSYSTEM

Such investments have helped Britain's tech sector to shine at a time when some other firms are less optimistic.

A recent survey showed that three out of four companies with sales between 100 million pounds and 1 billion pounds have considered moving operations to the European continent in the wake of the vote.

Mendelsohn said that Britain needed to work hard to keep its position as a global hub for technology.

ALSO IN TOP NEWS

“We need to make sure that we continue to look outwards and not inwards; we need to stay competitive, and we need to remain a welcome home to tech,” she said.

London ranked no.1 for start-ups in the 2016 European Digital City Index, and Google said the talent pool, educational institutions, and passion for innovation helped it decide to invest more in Britain, sentiments echoed by Mendelsohn.

“It's a place that our engineers want to come and work at, it's a place that we see this amazing ecosystem, not of just tech companies but also of creative companies coming together inspiring, fuelling one another,” she said.

Facebook has a complex corporate structure for tax purposes and declared Dublin as its European headquarters which means almost no taxable profits are reported in the UK. It also has significant historic tax losses on its books, which means any cut in corporation tax would have little impact on its finances.

UK Prime Minister Theresa May is reported to be considering cutting corporation tax from the 20 percent headline rate in a move to attract companies away from other parts of the EU to Britain.

(Additional reporting by Tom Bergin; Editing by Kate Holton and Alexander Smith)

By Sarah Young | LONDON

Office stationery chain Staples shops to close following a £1 deal

(qlmbusinessnews.com via telegraph.co.uk – – Fri , 18 Nov, 2016) London, Uk – –

Staples Stationary
Mike Mozart/flickr

The UK high street is losing another retail name as office stationery chain Staples shops will close following a £1 deal with a turnaround firm.

The move comes after US parent, Staples Inc, hired KPMG to explore options for its European operations after its attempted $6bn (£4.8bn) merger with US rival Office Depot was blocked by regulators.

Hilco, known for its turnaround of HMV, is buying Staples' UK business and is planning to phase out Staples 106 shops across the country, which employ more than 1,100 staff in total.

Paul McGowan of Hilco Capital said: “We are pleased to have concluded a transaction with Staples, Inc. and look forward to working with the UK team.”

“While retail in the UK has been challenged recently, a team led by retail veteran Alan Gaynor will work alongside the existing management team to build a plan for success for the business.”

Staples has online and business-to-business operations which could continue to trade.

“Agreeing to sell our UK retail business to Hilco aligns with our strategy of focusing on our North American and mid-market business, and is a meaningful step in that process,” said Staples chief executive Shira Goodman. She added that the company is still “evaluating strategic alternatives for the remainder of Staples Europe”.

Last month, the Telegraph reported that investment firm Cerberus, which bought billions of UK and Irish bank assets in the wake of the financial crisis, was in negotiations over a rescue deal for the Staples' European business, which includes 200 stores, for a nominal sum.

Staples has struggled for years as revenue declines and demand wanes for traditional office basics such as folders, ink cartridges and filing cabinets, and as shoppers hunt for bargains online. However, a restructuring plan last year meant that UK sales grew by 7pc to £116m and the business returned to the black with £3.4m of profits.

Staples’ difficulty follows the collapse of high street chains BHS, Austin Reed, American Apparel, My Local and Store 21 this year.

By Ashley Armstrong

Middle Class buy-to-let dream hampered by tough new mortgage affordability tests

(qlmbusinessnews.com via telegraph.co.uk – – Thur, 17 Nov, 2016) London, Uk – –

Buy to let
Mark Moz/flickr

Property investors will face tough new mortgage affordability tests from next year which will herald the “beginning of the end of the middle-class buy-to-let dream”, experts have warned.

Philip Hammond, the Chancellor, announced additional rules on buy-to-let which will result in ordinary investors being able to borrow far less towards their purchase.

Mr Hammond indicated he was concerned about “financial stability” following a boom in residential property investment as savers desperately try to find profitable places to put their money.

Many have turned to buy-to-let to fund retirement income after being effectively barred from putting more money in to their pensions by the Government. Low mortgage rates have made the investments attractive.

However, ministers have recently targeted buy-to-let properties with aggressive new taxes, including higher rates of stamp duty and the removal of tax relief on mortgage interest.

Experts fear that the announcement will make the investments unaffordable for many middle class people, closing down another potential saving opportunity.

Mr Hammond and Theresa May, the Prime Minister, are expected to come under pressure to ease the burden on savers with new tax breaks or government help in next week's Autumn Statement.

Under the plans to give the Bank of England extra powers, affordability checks are to be introduced for investors, who will now have to prove they can make a profit of 25 per cent profit from tenants even if large interest rate rises make their mortgage more expensive.

The Chancellor said: “It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as safe as possible.

“Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.”

Ray Boulger, from John Charcol, a mortgage adviser, said: “The rationale for these stress tests are the same as those which were brought into the residential market to avoid people being unable to repay their mortgages if interest rates rise.

“If interest rates were to move up quickly that would cause buy-to-let investors a huge problem as they are too acclimatized to low rates. If rates rose sharply and they were unable to repay their mortgages en masse the market could suddenly be flooded with properties.”

From Jan 1 the Prudential Regulation Authority, the lending arm of the Bank of England, will impose new minimum affordability thresholds which will reject borrowers who make less than 25 per cent profit from their investment, or would no longer be able to afford mortgage repayments if interest rates rise to 5.5 per cent.

For example, someone with a £200,000 interest-only mortgage borrowing at 1.79 pc would have monthly mortgage payments of £299.

However, as these repayments would rise to £917 if their rate of repayment interest rose to 5.5 per cent, they would need to prove they could charge rent of £1,146 a month to be approved for the mortgage.

As the Bank rate is currently at a record low of 0.25 per cent, mortgage deals are cheaper than ever with many charging less than 2 per cent interest.

Andrew Montlake, director at Coreco, a mortgage broker, said: “Many people will see this as the beginning of the end of the middle class buy-to-let dream which is a big shame. “

Until recently middle-class savers have helped fuel a buy-to-let boom in Britain with more than two million savers funnelling cash into rental properties to help fund their retirement.

The Bank is forcing lenders to “toughen up” over concerns they have relaxed standards for landlords.

Prior to the announcement of the Bank's new rules, some lenders went further and tightened their criteria voluntarily with some, including Nationwide, now refusing to lend to landlords making rental profits of less than 45 per cent of their mortgage repayments.

When the building society announced the change in April this year, Paul Wootton, managing director of its buy-to-let arm, The Mortgage Works, said the move was a response to the change on tax relief.

He said: “This change is a proactive move that recognises the need to help safeguard rental cover for landlords over the coming years, and in advance of the forthcoming changes to mortgage interest tax relief.”

While would-be landlords are being locked out of the market, current landlords are rapidly looking to sell, studies have indicated.

One survey of almost 1,000 experienced private landlords by the Residential Landlords' Association found a quarter of buy-to-let investors are planning to sell their rental properties as a result of the Government tax changes.

By Katie Morley

 

How Uber Rival a car-hailing startup came to a Screeching Halt

(qlmbusinessnews.com via bloomberg.com – – Mon, 14 Nov, 2016) London, Uk – –

When bills for a corporate credit card used by Karhoo Inc. Chief Executive Officer Daniel Ishag arrived, employees in the London office of the car-hailing startup often spotted unusual purchases. There were designer shoes and clothing, along with veterinarian’s bills for a pet dog. The employees flagged the costs as potentially non-business related, but signs of lavishness continued — first-class flights, a blowout in Las Vegas, Cuban cigars.

Ishag’s spending, described by several employees and those familiar with Karhoo’s finances, came to an abrupt end this week when the company shut down after running out of money. As the extent of the startup’s financial problems became known in recent weeks, Ishag stopped coming to the office and two other executives embarked on a futile attempt to keep the firm afloat, said the people, who asked not to be identified for fear of damaging career prospects. About 200 people lost their jobs.

Ishag did not respond to phone calls, e-mail or LinkedIn messages seeking comment. Some of the money was reimbursed, according to a person familiar with the costs. Employees said they didn’t know where Ishag was currently. In an e-mail to employees this week, he apologized for the company's collapse.

“I deeply regret the impact and inconvenience recent events have caused you all,” Ishag said in the e-mail. “I feel responsible, not only to you but also to your dependents as well, and wanted to extend my apologies to you all. I truly wish things had turned out very differently.”

Even by the standards of tech startups that fail more often than not, Karhoo’s demise is extraordinary. Before the company’s price-comparison app for hailing a taxi was released, Karhoo grabbed headlines last year when it reportedly raised $250 million and said it had plans to bring in more than $1 billion. In fact, it never raised that much. According to internal financial documents, it had raised $39 million as of September and was bleeding money as it attempted to take on Uber Technologies Inc. In its two-year life, Karhoo generated about $1 million in net revenue, according to the records shared with Bloomberg.

No Funds

Karhoo employees said they were largely unaware of its dire position until a recent Friday, when managers told them the company didn’t have enough funds to make payroll. There were no severance packages and people weren’t paid for the previous month’s work. People were furious. As the announcement was made, Ishag had been in Singapore in a last-ditch effort to raise more money, two former employees said.

Many employees were left wondering how the company could have blown through what they thought was $250 million in the bank. Some of them joined Karhoo because they were told in interviews that the company had raised that much money, making it more stable than a typical startup. After the figure appeared in U.K. news reports, company executives also cited it in meetings with potential business partners, according to people who attended.

Some workers had been confident in the company’s trajectory, after its app was downloaded nearly 300,000 times since it was introduced in May.

The company spent heavily to expand globally, several employees said. Long before the app was launched, Ishag opened offices in London, Singapore and Tel Aviv and built a marketing staff of more than two dozen. The company rented apartments in New York, including one at a cost of $12,000 per month, said a person with direct knowledge of the cost. The company also had a 10-year lease on an office in New York.

Ishag touted Karhoo as an upstart competitor to Uber. Its app aggregated cars available from non-Uber taxi and car services, allowing customers to pick from them. But the launch, originally scheduled for January 2016, was pushed back to May.

$400 Million

As Karhoo introduced its service in London and several other U.K. cities, Ishag was attempting to raise more money. One person involved in the process said Ishag was at one point seeking a $400 million valuation. To entice investors, he had to show that customers were using the service in droves to hire taxis, several former employees said.

The company began an aggressive promotional campaign in which it gave away codes for free rides, according to former employees. But the service had a bug that didn’t properly process the codes, meaning customers could use them over and over again. Some people on social media said they had taken more than 100 free rides. The company had to pay drivers or taxi companies even though Karhoo didn’t receive any money from customers. In October, about 70 percent of its bookings were with promo codes, according to sales documents seen by Bloomberg.

The app’s payment processing system also didn’t have many fraud protections, such as verifying a user’s address or requiring an e-mail address to set up an account, several people said. At one point, more than 90 percent of passengers’ credit-card payments were being rejected as a result of the problems, three people said.

Customer service was such an issue that Karhoo hired an outside contractor to handle it. The company, ModSquad Inc., is owed nearly $500,000, according to a breach-of-contract suit filed against Karhoo in New York. One employee said Karhoo canceled the contract after it realized the cost of ModSquad's service equated to about $3 per ride each customer was taking — more than it was taking in total after paying drivers. Several taxi companies that are owed money have been calling former Karhoo employees seeking payment, one person said.

Karhoo and ModSquad are scheduled to appear on Dec. 8 in the U.S. District Court in New York. When contacted, Erik Anderson, the lawyer representing ModSquad, said he couldn't comment about ongoing litigation.

Dog, Drinks

Employees described Ishag as persuasive and said he often talked about “creating a reality” for the company. He also gave himself perks like smoking in the office, flying first class and staying in top hotels, while staff members flew in economy and slept at budget inns.

When his dog, a pug, required a medical procedure, about $6,000 was charged for a veterinarian, two people familiar with his expenses said. In Las Vegas for a technology conference, he threw a party with drinks, exotic dancers and party favors that included Cuban cigars with Karhoo’s logo, two people said.

The company approached one of the Las Vegas party attendees later to see if he wanted to invest. Having seen what was spent at the party, the person demurred, according to a person involved in the fundraising attempt.

Ishag’s career started at age 17 when he left his London school and went to India to start his first business. In 2000, he was one of three founders of an online advertising group called Espotting, which used a network of search engines to deliver targeted traffic to advertisers. Ishag’s next move was to become CEO of waste-management company Bluewater Bio Ltd., which went public in 2007 and then got taken private again. He spent eight years there before departing.

Ishag said in a July interview with the online publication Startup that he got the idea for a comparison app for ground transport while in California and then decided to develop a prototype in India before raising money for Karhoo from investors. A cousin, David Ishag, joined the company’s board as chairman. David Ishag didn’t respond to a LinkedIn message seeking comment.

The company has dozens of backers, including Eric Daniels, the former CEO of Lloyds Banking Group Plc, who said his investment was “modest.” Other reported backers include Nick Gatfield, former chairman and CEO of Sony Music Entertainment; Jonathan Feuer of the private equity firm CVC Capital Partners; and David Kowitz, co-founder of Indus Capital Partners. Feuer declined to comment. Gatfield and Kowitz couldn’t be reached.
Shutting Down

The company closed down owing $30 million to creditors, employees, property managers, advertising agencies and other contractors, according to one person who has seen the figures.

Ishag wasn’t seen around the company’s offices as employees boxed up their belongings and left. In the e-mail, he thanked them for working without pay.

In the interview with Startup, Ishag discussed the challenges of building a tech venture.

“If someone wants to do something special or difficult, that person has really got to focus all their efforts,” he said. “It takes a toll; it takes a toll on the people around you. It takes a toll on your partner if you’ve got one, or on your wife. That’s why I’m saying, as an entrepreneur, it is a way of life because it does affect everything you do.”

By Adam Satariano and David Hellier

Tesco Bank target of Cyber fraudsters 20,000 customers accounts hacked

(qlmbusinessnews.com via uk.reuters.com – – Mon, 7 Nov, 2016) London, UK – –

 

The banking arm of Britain's biggest retailer Tesco was scrambling on Monday to deal with an online attack over the weekend on 40,000 customers' accounts, 20,000 of which had money removed.

The hack is the first on a British bank known to have resulted in customers losing money, adding to growing concerns about the British financial sector's vulnerabilities to cyber attacks, which have jumped in frequency over the past two years.

Tesco Bank, which manages 136,000 current accounts, stopped all online transactions while it worked to resume normal service, although customers could still use their bank cards in shops and to withdraw money from cash machines.

“Any financial loss that results from this fraudulent activity will be borne by the bank,” Tesco Bank Chief Executive Benny Higgins told BBC radio. “Customers are not at financial risk.”

“We think it would be relatively small amounts that have come out but we're still working on that,” he said, adding that he expected the cost of refunding customers would be “a big number but not a huge number”.

Shares in supermarket chain Tesco, which wholly owns Tesco Bank, were down 1.2 percent at 200.20 pence by 1030 GMT.

The bank is a minnow in Britain's retail banking market, with about 2 percent of current accounts, and represents only a small part of Tesco's overall business.

It contributed 503 million pounds ($623.4 million) to the group’s revenue of 24.4 billion pounds in the first half of its 2016-17 financial year.

But while the financial hit to the group may be limited, Tesco Bank risks serious reputational damage from an attack that affected 29 percent of its customer current accounts.

Other British banks have been targeted by cyber attacks in recent years, but the Financial Conduct Authority (FCA) which regulates the sector said it was not aware of any previous incident in which customers had lost money.

Reported attacks on financial institutions in Britain have risen from just five in 2014 to over 75 so far this year, according to FCA data, but bank executives and providers of security systems say there are many more unreported attacks.

HSBC issued a series of apologies to customers earlier this year after its UK personal banking websites were shut down by a “denial of service” attack, but no customer funds were at threat during that breach.

Cliff Moyce, global head of financial services at DataArt, a network of technology consulting and software services firms, said reduced staffing levels over the weekend were likely to have been one of the reasons for the impact of the hack.

“The clever part was doing it over the weekend when banks are typically understaffed, and will respond more slowly,” he said in a comment emailed to media.

“Automated fraud detection systems appear to have worked well, but a lack of people at desks will not have helped.”

Other well-known British brands hit by significant cyber attacks over the past year include telecoms firms TalkTalk [TALK.L] and Vodafone [VOD.L], business software provider Sage [SGE.L] and electronic goods retailer Dixons

By Estelle Shirbon | LONDON

(Additional reporting by Michael Holden, James Davey and Huw Jones; Editing by Greg Mahlich)

Chancellor Philip Hammond sets out the government’s Cyber-Security Strategy

(qlmbusinessnews.com via bloomberg.com – – Tue, 1 Nov, 2016) London, Uk – –

Cyber security
UK in Spain/flickr.com

Businesses and homes are increasingly vulnerable to cyber attacks as people install Internet-connected appliances and companies rely on outdated systems, U.K. Chancellor of the Exchequer Philip Hammond warned.

Hammond used a speech in London Tuesday to set out the British government’s Cyber-Security Strategy, pledging to “strike back” against malicious activity. It came as the U.K.’s spy chief warned Russia is using the same online tools to target Britain. In an interview with the Guardian newspaper, MI5 Director General Andrew Parker said Russia is an increasing threat to the U.K. and is employing cyber attacks to threaten its industry, economy and military capability.

Russia “is using its whole range of state organs and powers to push its foreign policy abroad in increasingly aggressive ways — involving propaganda, espionage, subversion and cyber-attacks,” Parker told the Guardian. “Russia is at work across Europe and in the U.K. today. It is MI5’s job to get in the way of that.”

Parker’s claims were dismissed by Kremlin spokesman Dmitry Peskov, who said they had no bearing in reality.
‘Activist’ Approach

Parker said his interview, the first given by the service’s chief in its 107-year history, reflects the need for the public to understand the interventions required to keep them safe. That point was taken up Hammond, who pledged to boost law-enforcement capabilities and encourage universities to conduct research into security as part of a more “activist” approach.

“Britain is already an acknowledged global leader in cyber security,” Hammond said in a statement before the speech. “Our new strategy, underpinned by 1.9 billion pounds ($2.3 billion) of support over five years and excellent partnerships with industry and academia, will allow us to take even greater steps to defend ourselves in cyberspace and to strike back when we are attacked.”

Britain has identified cyber attacks as a “tier one” national-security risk, alongside terrorism and global instability. To fight the threat, a National Cyber Security Center is due to have a full staff of 700 in its new London headquarters next year. The government is also seeking to push through a bill before Parliament to preserve and extend the powers of security and law-enforcement agencies, allowing them to gain access to communications.

The bill is a proportionate response to the threat to the U.K. and effectively balances privacy and security, Parker told the Guardian.

By Robert Hutton and Thomas Penny

UK technology start-up Improbable seeks backing from both sides of the Atlantic

(qlmbusinessnews.com via uk.finance.yahoo.com via new.sky.com – – Wed, 26 Oct, 2016) London, UK – –

A British technology company which last year attracted money from one of the hottest investors in Silicon Valley is in talks with prospective backers about a new funding round that could value it at more than £400m.

Sky News has learnt that Improbable, which creates virtual worlds used in complex computer games, has approached investors on both sides of the Atlantic (Shanghai: 600558.SS – news) about putting fresh money into the business.

The talks, which have yet to be concluded, come 18 months after Improbable took $20m from Andreessen Horowitz, the California-based tech investor which was an early backer of Facebook (NasdaqGS: FB – news) .

Improbable is widely regarded as one of the most exciting companies to be based in Tech City, the district of London which acts as a hub for digital start-ups.

The company, which says its software has a wide variety of potential applications, such as modelling how a virus might spread through a major city, was founded little more than three years ago by Herman Narula, a Cambridge computer science graduate.

Improbable has also described its Spatial operating system as being applicable in areas such as economics, finance, town planning, transport and military training.

Last year's fundraising was reported to have valued Improbable at $100m, with talks about a new round raised at five times that valuation raising eyebrows among some technology investors.

“It's a fantastic idea, but the revenue model isn't really proven yet,” said one serial backer of London start-ups.

Improbable is understood to have presented at a conference hosted by Allen & Co, the investment bank which focuses on technology and media deals, earlier this year.

Augmented and virtual reality companies are attracting significant investment from global technology investors, further inflating many of their valuations.

Allen & Co is now said to be assisting Improbable with its fundraising discussions. Improbable declined to comment.

AT&T agreed to buy Time Warner for $85 billion

(qlmbusinessnews.com via uk.reuters.com – – Sun, 23 Oct, 2016) London, UK – –

AT&T Inc said on Saturday it agreed to buy Time Warner Inc for $85.4 billion (70 billion pounds), the boldest move yet by a telecommunications company to acquire content to stream over its high-speed network to attract a growing number of online viewers.

The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by U.S. antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.

Dallas-based AT&T said the U.S. Department of Justice would review the deal and that it and Time Warner were determining which Federal Communications Commission licenses, if any, would be transferred to AT&T in the deal.

U.S. lawmakers were already worried about cable company Comcast Corp's $30 billion acquisition of NBCUniversal, creating an industry behemoth. Several argued for close regulatory scrutiny of the AT&T deal.

“Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny,” said U.S. Senator Richard Blumenthal, former attorney general of Connecticut. “I will be looking closely at what this merger means for consumers and their pocketbooks.”

U.S. Republican presidential nominee Donald Trump said at a rally on Saturday he would block any AT&T-Time Warner deal if he wins the Nov. 8 election. Trump has complained about media coverage of his campaign, especially by Time Warner's CNN.

“It's too much concentration of power in the hands of too few,” said Trump.

Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.

CONTENT PLUS DELIVERY

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5 billion.

It had about 142 million North American wireless subscribers as of June 30, and about 38 million video subscribers through DirecTV and its U-verse service.

New York-based Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.

The deal is the latest in the consolidation of the telecom and media sectors, coming on the heels of AT&T's purchase of NBCUniversal. AT&T's wireless rival Verizon Communications Inc is in the process of buying internet company Yahoo Inc for about $4.8 billion.

Time Warner Chief Executive Officer Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014.

FINANCING

AT&T said the cash portion of the purchase price would be financed with new debt and cash on its balance sheet. AT&T said it has an 18-month commitment for an unsecured bridge term facility for $40 billion.

AT&T currently has only $7.2 billion in cash on hand. Further borrowing could put pressure on its credit rating as it already had $120 billion in net debt as of June 30, according to Moody's.

AT&T said the deal would add to earnings per share in the first year after closing. It said it expects $1 billion in annual run-rate cost savings within three years of closing, chiefly driven by lower corporate and procurement spending.

5G IS COMING

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. New mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

“We think 5G mobile is coming, we think 5G mobile is an epic game-changer,” Rich Tullo, director of research at Albert Fried & Co, said in a research note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

Perella Weinberg Partners LP, Bank of America Corp and JPMorgan Chase & Co were financial advisers to AT&T, with Bank of America and JPMorgan also offering bridge financing, while Sullivan & Cromwell LLP and Arnold & Porter LLP provided legal advice.

Allen & Co LLC, Citigroup Inc and Morgan Stanley acted as financial advisers to Time Warner, while Cravath, Swaine & Moore LLP was its legal adviser.

By Greg Roumeliotis and Jessica Toonkel | NEW YORK

(Additional reporting by David Shepardson, Liana Baker, Malathi Nayak and Diane Bartz; Writing by Bill Rigby; Editing by David Gregorio)

 

London frets over future,Thirty years on from Big Bang

(qlmbusinessnews.com via uk.reuters.com – – Fri, 21st Oct, 2016) London, UK – –

LONDON (IFR) – Bang! It was the explosion in financial markets heard across the world 30 years ago which transformed the City of London from a cosy network of long-established firms into a cut-throat landscape dominated by foreign banks.

This week is the 30th anniversary of Big Bang, a package of reforms across the securities industry that shaped the City that exists today, putting London alongside New York as the world's two dominant financial centres.

This year's anniversary has extra significance. International firms that arrived on the back of Big Bang are considering whether to stick with London or move operations and jobs elsewhere following Britain's vote in June to leave the European Union.

“It [Big Bang] put London on the map in a way it wasn't before. All the international firms came to London or enlarged what they had,” recalled Nicholas Goodison, who was the architect of the reforms as chairman of the London Stock Exchange at the time.

OVERNIGHT JOLT

Although the full impact of Big Bang evolved over years and the reasons for the reforms went back more than a decade, the transformation is associated with an overnight jolt – on October 27 1986.

That was the brainchild of Goodison. He said a number of the necessary changes were inter-related so should all come at the same time, with good warning, to ensure orderly change.

“We could have done it piecemeal but they were all too closely linked to each other,” Goodison, now 82, told IFR in an interview last week.

There were several parts to Big Bang: it abolished minimum fixed commissions on trades; it removed “single capacity”, which since 1911 had separated the role of brokers, who acted as agents for clients, and jobbers, who made the market and provided liquidity by holding stock on their books; and it allowed foreign ownership of UK brokers, to fix capital shortfalls at many firms.

Big Bang also introduced electronic share trading, which did away with the need for face-to-face share deals and made trading far quicker and more efficient.

The changes were brought in to head off an investigation by the competition watchdog, which wanted to take the stock exchange to the Restrictive Practices Court, a move Goodison said would have resulted in chaos.

In 1983 he proposed to Cecil Parkinson, trade and industry secretary at the time, that he would eliminate fixed commissions within three years.

Parkinson agreed and, helped by Chancellor of the Exchequer Nigel Lawson, persuaded Prime Minister Margaret Thatcher to back the reforms. That was not easy because Thatcher “didn't like being friends with the City”, Goodison recalled. He said she subsequently took little interest in Big Bang, despite being credited as its driving force.

“The myth that Big Bang was part of Mrs Thatcher's revolution is just wrong,” Goodison said.

Goodison said the reforms were inevitable after the US abolished fixed commissions in 1974 and Britain scrapped exchange controls in 1979.

“The writing was on the wall and we knew that,” he said.

“Anybody could forecast that the competitive pressures on fixed commission would increase because the biggest securities houses in the world were in America. It was obvious the thing was creaking.”

Goodison said Big Bang achieved its goal better than a court ruling would have done because it pushed through changes smoothly.

The biggest challenge was setting up the electronic trading platform. “It broke down in the first hour. It was difficult. But the reason it broke down was that it had a huge volume of people trying to access it on the first morning and everybody pressed buttons at once.”

It was sheer curiosity that caused it to break down, he said.

FOREIGN PREDATORS

Big Bang sparked profound changes across the City.

Brokers, jobbers and merchant banks started merging. Some were bought by UK clearing banks, but many more were snapped up by big US, European and Asian banks.

Well-known firms such as James Capel, Schroders and Warburg kept some branding in bigger firms, but other old names such as Pinchin Denny and Scrimgeour Kemp Gee were easily swallowed.

That has led to criticism of the “Wimbledonisation” of the City – that London hosts the activity but most of the top players are foreign. Barclays and HSBC are two of the top 10 investment banks today, but the dominance of the City by overseas firms, especially from the US, is a legacy of Big Bang.

“Under the previous system it was pretty much a closed shop, and suddenly they [foreign firms] were allowed to come in,” said Paul Mumford, a fund manager at Cavendish Asset Management.

“A lot of banks seized the opportunity and London became a global centre for markets. It could never have happened if we hadn't had this change,” Mumford told IFR.

Just as London firms were swallowed or reinvented, many careers changed, including Mumford's. He had been a broker and analyst, but a year after Big Bang he moved into fund management.

“It was a relatively painless process but it took a little while for it to have its repercussions on certain areas,” Mumford said.

There were other less direct but still significant effects of Big Bang, including making it easier for firms to raise capital, contributing to the growth of hedge funds, and helping the rise of Canary Wharf as a new financial district in East London as firms could trade further away from the City using electronic communications.

Culture also changed. Hours became longer, lunches shorter and pay rose. The business became more aggressive and less clubby, according to people who worked in the City on both sides of the changes.

Critics reckon many of the banking industry's misconduct problems of the past decade can be traced to Big Bang, as it gave rise to a bonus culture that undermined the City's long-standing code of conduct and integrity.

Goodison, for his part, was not paid for his work for the stock exchange. He was its last unpaid chairman, from 1976 to 1988, and held the role alongside his position as senior partner at Quilter Goodison, a broker that went the way of many peers – it was bought by an overseas predator, France's Paribas.

Goodison said London was right to welcome international firms and needs to continue to do so to stay in front, aided by the advantages of its time zone, language and legal system.

“If London wants to win it has to be open. You can't run a closed shop and win. The essence of London's financial markets is openness to the world,” he said.

By Steve Slater

Lender Microfinance Ireland tackle low awareness to its loans

(qlmbusinessnews.com via uk.finance.yahoo.com via TheJournal.ie – – Thur, 20 Oct, 2016) London, UK – –

Microfinance ireland (mfi) has rebranded its loan packages for small businesses to make its overall offering clearer to customers.
The government-backed lender, which specialises in loans to firms with fewer than 10 employees, has segmented its loan packages into four categories:

Set-up loans for startups, €5,000-€25,000
Cashflow support for existing businesses, €5,000-€25,000
Business development loans for existing businesses, €5,000-€25,000
Small loans for businesses with low funding requirements, €2,000-€25,000

Until now, the organisation has marketed a blanket offer of loans from €2,000 to €25,000 without explaining what exact options were available.
Chief executive Garrett Stokes said that the MFI largely relied on local enterprise offices to explain and tease out the different loan packages available.

He told Fora that he expects the rebranding exercise will “make our overall offering more user-friendly”.

“What we’ve tried to do with the packaging is be very precise so it becomes much clearer to (customers) as to what we’re offering, the terms of the offer and so that when they come online to us through their local enterprise office, they know exactly what they’re looking for.”
Awareness

In the most recent ‘bank watch survey’ by ISME, which represents small- and medium-sized businesses in Ireland, awareness of the government’s microfinance scheme was down with just over half of respondents saying they knew what it was.

Stokes said the clearer loan packages will boost awareness of the programme, which he described as a “huge advantage” to early-stage businesses.

“The majority of our customers are people who cannot, for whatever reason, get lending from traditional lenders,” he said. “(MFI) enables somebody who has a good idea and wants to set up a businesses but can’t get the money themselves or funding from a bank to have another location to get help.”

He said that MFI’s criteria is “quite different from a bank” because all of its loans are unsecured.

By Conor McMahon