Hyundai Capital faces sanctions over hacking case

The financial watchdog said Tuesday that it is considering penalizing Hyundai Capital and several of its staff for incurring cyber attacks due to negligent internal controls.

Those subject to the regulatory sanctions will possibly include several executives, including CEO Ted Chung, of the loan issuance company jointly owned by Hyundai Motor Group and U.S.-based GE Capital, the Financial Supervisory Service said.

Heavy penalties are expected to be handed down on the company and its key figures, with the FSS saying at a press conference that the financial incident had caused “public anxiety and social woes”.

The FSS, which has conducted an intensive inquiry into the incident, said it found that personal information of about 1.75 million customers of the automobile-related loan company was leaked.

An FSS official said it found that the financial company did not take enough preventive measures against such attacks, failing to meet electronic trading regulations.

“Several staffers of Hyundai Capital should be held accountable for causing public jitters on the security of electronic financial transactions and triggering social troubles due to the incident,” he said.

The FSS is fine-tuning sanction levels and market observers expect that company CEO Ted Chung could also face stern disciplinary action.

What makes this case all the more severe is the fact that the company has reportedly been aware of the incident since receiving a hackers’ email attempting to blackmail the company.

An unknown hacker contacted the company on April 7, demanding money in return for not releasing the customers’ private information.

The hacking was made public after the company asked police to investigate the case April 8. The hacking had been carried out since February without detection.

In an attempt to avoid detection, hackers conducted their infiltrations bit by bit without carrying off large amounts of information all at once, according to police and the FSS.

As such, it may have been difficult to detect their presence. However, the FSS clarified that Hyundai Capital must be sanctioned as its countermeasures came too late.

In a move to map out supplementary measures to prevent weak points in the financial market, the FSS has launched an investigation into 40 financial companies by forming a task force in coordination with agencies including the Information Shares Analysis Center.

The watchdog is also planning measures to prevent similar attacks and bolster financial IT security.

By Kim Yon-se (kys@heraldcorp.com)