#CyberFLASH: How Chinese hacking felled telecommunication giant Nortel

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Cyber security adviser Brian Shields sensed something was wrong when he received a message from his manager at North American telecommunications giant Nortel.

An employee in the United Kingdom office had detected that a senior executive in Canada, Brian McFadden, had downloaded the Brit’s work documents from the company server.

It was odd, because the documents were irrelevant to McFadden’s responsibilities. The British employee sent an email to McFadden asking why he wanted the documents.

An email shot back from McFadden: “I don’t know what you’re talking about.”

As Nortel’s senior adviser for systems security, Shields was called in to investigate. “When I first started looking into it I found that the access was not internal,” says Shields.

“The documents downloaded to the executive’s computer in Ottawa were done through remote access from a site over in China.”

Shields quickly realised that Nortel, at the time one of the world’s biggest ­commercial telecommunications equipment manufacturers, had been the victim of hacking. He traced most of the activity back to Shanghai. It was early 2004.

Upon further investigation, Shields discovered that seven staff accounts had been compromised via remote access.

One of the breached accounts belonged to the company’s then chief executive Frank Dunn.

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