Stories
Slash Boxes
Comments

SoylentNews is people

posted by martyb on Monday July 09 2018, @04:10PM   Printer-friendly
from the windfall? dept.

Judge Orders Chinese Wind-Turbine Maker To Pay $59 Million For Stealing Trade Secrets

A federal judge has ordered China's largest wind-turbine firm, Sinovel, to pay $59 million for stealing trade secrets from a Massachusetts-based technology company.

Last January, Sinovel was found guilty of stealing trade secrets in federal criminal court in Madison, Wis. The company paid an Austria-based employee of American Superconductor Corp. to steal its source code for software that powered wind turbines.

[...] Sinovel was the largest customer of American Superconductor Corp. And then the Chinese company suddenly began rejecting shipments of American Superconductor's electronic components in 2011. The Massachusetts tech company learned that Sinovel was using a pirated version of the software it made in the wind turbines it installed. The ordeal left American Superconductor in perilous financial shape, and Wall Street analysts wrote it off as dead. The U.S. Department of Justice said that the company lost more than $1 billion in shareholder equity and 700 jobs.

Previously: China's 'Great Brain Robbery' Hacking of US Companies a National Security Emergency

Owner of American Superconductor, Daniel McGahn, discovered a version of its latest, unreleased software being used on a turbine in China. Despite doing everything possible to keep its source code off the internet it was discovered that the Chinese company turned one of McGahn's employees by offering him money, women and an apartment in return for the full operating code.

To make matters worse, when McGahn decided to sue Sinovel for $1.2bn (£840m) and hire a computer security firm to investigate the case, his firm claims the Chinese company hacked the company's system to see what course of legal action it was taking in order to get a leg-up in proceedings.

"Whenever there's a big lawsuit we'll see the Chinese government actually break into that company, break into the legal department and figure out what's going on behind the scenes so they can better deal with that lawsuit," said George Kurtz, co-founder of computer security company CrowdStrike.


Original Submission

Related Stories

China's 'Great Brain Robbery' Hacking of US Companies a National Security Emergency 41 comments

Submitted via IRC for AndyTheAbsurd

"This is a serious threat to our national security. I mean, our economy depends on the ability to innovate. And if there's a dedicated nation state who's using its intelligence apparatus to steal day in and day out what we're trying to develop, that poses a serious threat to our country," [John Carlin, assistant attorney general for US National Security] told 60 Minutes.

One company cited in the report to suffer from the hands of Chinese espionage is American Superconductor, a software developer for wind turbines. The company once was turning over almost half a billion a year but almost went out of business after entering a contract with a government-owned Chinese wind turbine manufacturer, Sinovel.

Owner of American Superconductor, Daniel McGahn, discovered a version of its latest, unreleased software being used on a turbine in China. Despite doing everything possible to keep its source code off the internet it was discovered that the Chinese company turned one of McGahn's employees by offering him money, women and an apartment in return for the full operating code.

To make matters worse, when McGahn decided to sue Sinovel for $1.2bn (£840m) and hire a computer security firm to investigate the case, his firm claims the Chinese company hacked the company's system to see what course of legal action it was taking in order to get a leg-up in proceedings.

"Whenever there's a big lawsuit we'll see the Chinese government actually break into that company, break into the legal department and figure out what's going on behind the scenes so they can better deal with that lawsuit," said George Kurtz, co-founder of computer security company CrowdStrike.

Source: http://www.ibtimes.co.uk/chinas-great-brain-robbery-hacking-us-companies-national-security-emergency-1538590


Original Submission

This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
(1)
  • (Score: 1, Insightful) by Anonymous Coward on Monday July 09 2018, @04:18PM (9 children)

    by Anonymous Coward on Monday July 09 2018, @04:18PM (#704605)
    but the hard line is the only way to get traction here
    finger wagging and stern words is going to get a chuckle out of china at best
    • (Score: 0) by Anonymous Coward on Monday July 09 2018, @04:23PM (7 children)

      by Anonymous Coward on Monday July 09 2018, @04:23PM (#704608)

      nothing to do with his orangeness (but watch him try to take credit!), this started ~5 years ago

      • (Score: 1, Insightful) by Anonymous Coward on Monday July 09 2018, @06:58PM (5 children)

        by Anonymous Coward on Monday July 09 2018, @06:58PM (#704667)

        For every time Trump gets called out for things he's not directly making a mess out of you get Trumpettes trying to paint him as the second coming of Christ.

        • (Score: 3, Insightful) by DannyB on Monday July 09 2018, @07:05PM

          by DannyB (5839) Subscriber Badge on Monday July 09 2018, @07:05PM (#704670) Journal

          you get Trumpettes trying to paint him as the second coming of Christ.

          It could be only a matter of time until they really try to do exactly that, and not metaphorically.

          Just an opinion.

          --
          People today are educated enough to repeat what they are taught but not to question what they are taught.
        • (Score: 0) by Anonymous Coward on Monday July 09 2018, @07:16PM (1 child)

          by Anonymous Coward on Monday July 09 2018, @07:16PM (#704673)

          you get Trumpettes trying to paint him as the second coming of Christ.

          Sherly you next. Only the second coming?

          • (Score: 0) by Anonymous Coward on Monday July 09 2018, @11:43PM

            by Anonymous Coward on Monday July 09 2018, @11:43PM (#704787)

            Shirley you need to learn how to spell, and yes religious fundamentalists only come once. Anything else would be giving in to Lust!

            Why do you think Christ dated a whore? At least he could tread a thin line and get his voyeuristic rocks off.

        • (Score: 2) by VLM on Monday July 09 2018, @07:28PM (1 child)

          by VLM (445) Subscriber Badge on Monday July 09 2018, @07:28PM (#704681)

          Just call him the Dune/W40K God Emperor

          • (Score: 0) by Anonymous Coward on Monday July 09 2018, @11:52PM

            by Anonymous Coward on Monday July 09 2018, @11:52PM (#704792)

            The closest Trump gets to a Dune character is Baron Harkonnen, a big fat pedo.

      • (Score: 0) by Anonymous Coward on Tuesday July 10 2018, @06:34AM

        by Anonymous Coward on Tuesday July 10 2018, @06:34AM (#704955)

        All these flavors, yet you choose to be salty.

    • (Score: 0) by Anonymous Coward on Monday July 09 2018, @05:35PM

      by Anonymous Coward on Monday July 09 2018, @05:35PM (#704630)

      how is $59 Million not finger waving?

  • (Score: 1, Informative) by Anonymous Coward on Monday July 09 2018, @04:21PM (2 children)

    by Anonymous Coward on Monday July 09 2018, @04:21PM (#704607)

    More details here,
        https://host.madison.com/wsj/news/local/courts/chinese-wind-turbine-company-sinovel-fined-million-for-stealing-trade/article_7f607b0a-e0a0-5130-9a6b-314c5859b59c.html [madison.com]

    For example:
    In January, a federal jury deliberated for less than four hours before finding Sinovel guilty of conspiracy, theft of trade secrets and wire fraud following an 11-day trial. The case was first charged in the U.S. District Court’s Western District of Wisconsin more than five years ago.

    Assistant U.S. Attorney Timothy O’Shea said he believes that the conviction and sentence as well as Sinovel’s plummeting bottom line are showing the world that it doesn’t pay to try to steal trade secrets from U.S. companies. Court documents show Sinovel’s total assets that reached a high of $3.4 billion in 2013 dropped to just over $1 billion in 2017.

    “As Sinovel’s defense attorneys alluded to, they are a shell of their former selves,” O’Shea said. “If a little (federal) district like the Western District of Wisconsin can bring a multinational company like Sinovel to its knees through prosecution, that sends a pretty strong message.”

    also, it looks like the big restitution payments are already in progress:
    Sinovel already has paid AMSC $32.5 million of the $57.5 million it agreed to pay AMSC in restitution and it must send the remaining $25 million in the next 10 months, according to O’Shea. Sinovel also is in the process of paying the Massachusetts turbine owners all of its $850,000 restitution agreement, O’Shea said.

    • (Score: 2) by DannyB on Monday July 09 2018, @06:59PM (1 child)

      by DannyB (5839) Subscriber Badge on Monday July 09 2018, @06:59PM (#704668) Journal

      That's really bad.

      I can't imagine what I would do if if my assets had dropped from $3.4 Billion to only a mere $1 Billion. Oh, what would I do.

      Maybe he can get some help from the government.

      --
      People today are educated enough to repeat what they are taught but not to question what they are taught.
      • (Score: 2) by Gaaark on Monday July 09 2018, @11:45PM

        by Gaaark (41) on Monday July 09 2018, @11:45PM (#704789) Journal

        He should try Justin Trudeau here in Canada: just offer him some marijuana and he'll use my tax dollars to bail out the Titanic.
        :(

        Fuck I hate him.

        --
        --- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
  • (Score: 3, Interesting) by loonycyborg on Monday July 09 2018, @06:01PM (3 children)

    by loonycyborg (6905) on Monday July 09 2018, @06:01PM (#704640)

    It's in fact breach of contract, notion of "theft" should never be used in such matters because it's simply scammy way of going about this. It should be explicitly called "breach of contract and unlawful avoidance of restrictions on code reuse".

    • (Score: 1, Insightful) by Anonymous Coward on Monday July 09 2018, @06:26PM

      by Anonymous Coward on Monday July 09 2018, @06:26PM (#704652)

      Well, on the other hand, I think this means we can call people who infringe on the GPL thieves.

      I'm sure the AC who keeps confusing GPL and BSD licenses (along with being unable to understand RMS' goals because they're at odds with anarcho-capitalism) would approve.

    • (Score: 0) by Anonymous Coward on Monday July 09 2018, @08:30PM (1 child)

      by Anonymous Coward on Monday July 09 2018, @08:30PM (#704711)

      From the extended part of tfs:
      > Despite doing everything possible to keep its source code off the internet it was discovered that the Chinese company turned one of McGahn's employees by offering him money, women and an apartment in return for the full operating code.

      If bribing an employee doesn't result in theft (stealing), then the payer isn't getting their money's worth.

      • (Score: 2) by loonycyborg on Monday July 09 2018, @09:47PM

        by loonycyborg (6905) on Monday July 09 2018, @09:47PM (#704735)

        Really? It looks more like corporate corruption to me, and in not in any way theft. Assuming it even happened. If they're using absurd ideas like "theft of information" then they for sure could make things up.

  • (Score: 3, Insightful) by Grayson on Monday July 09 2018, @06:20PM (1 child)

    by Grayson (5696) on Monday July 09 2018, @06:20PM (#704650)

    $59 Million in exchange for almost $1 billion in losses... sounds like they didn't learn their lesson and crime does pay.

    • (Score: 3, Interesting) by DannyB on Monday July 09 2018, @06:53PM

      by DannyB (5839) Subscriber Badge on Monday July 09 2018, @06:53PM (#704666) Journal

      1. Start with deep pockets
      2. Steal promising new technology
      3. Mass produce it
      4. Get sued
      5. Drag out litigation
      6. Meanwhile, capture the market. If necessary sell at a loss rather than a profit. As IBM learned more than half a century ago, market share matters much more than short term profit.
      7. Lose1 litigation
      8. Pay "damages". Remember you haven't made much "profit" to "disgorge".
      9. You still own the entire market, gradually raise prices and begin profiting
      10. Inventor of stolen tech never makes significant market penetration
      11. Profit!

      I believe this story has played out more than once.

      1Loose

      --
      People today are educated enough to repeat what they are taught but not to question what they are taught.
  • (Score: 1, Insightful) by Anonymous Coward on Monday July 09 2018, @06:42PM (1 child)

    by Anonymous Coward on Monday July 09 2018, @06:42PM (#704661)

    The american businessman moved his business to the red dragons den and now it's repaying us in kind by stealing what little is left. Great job american businessman, you sold your people out to faux commies so you can buy another penis extending yacht. I for one welcome our new chinese overlords.

    • (Score: 1, Informative) by Anonymous Coward on Monday July 09 2018, @07:23PM

      by Anonymous Coward on Monday July 09 2018, @07:23PM (#704677)

      I for one welcome our new chinese overlords

      You don't speak Mandarin, you aren't working in an area we are interested, we have no use for you.

  • (Score: 3, Touché) by donkeyhotay on Monday July 09 2018, @07:02PM (2 children)

    by donkeyhotay (2540) on Monday July 09 2018, @07:02PM (#704669)

    In other news: the normal $59 BILLION dollar river of money, per DAY, flowing from Walmart to China, remains unabated.

    • (Score: 3, Touché) by takyon on Monday July 09 2018, @07:17PM

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Monday July 09 2018, @07:17PM (#704675) Journal

      But I need an $0.80 ice cream scoop;

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
    • (Score: 0) by Anonymous Coward on Wednesday July 11 2018, @07:01AM

      by Anonymous Coward on Wednesday July 11 2018, @07:01AM (#705620)
      <quote>In other news: the normal $59 BILLION dollar river of money, per DAY, flowing from Walmart to China, remains unabated.</quote>

      But that's how communism is being destroyed in China.

      From a trickle to a river to a flood of dollars washing away communism in China.

      Hence you can see capitalistic thievery like this. They're not copying the software for The Glorious Motherland but for profit.

      It's as capitalistic as car makers from Germany to Japan lying about emissions tests ;).
  • (Score: 5, Interesting) by VLM on Monday July 09 2018, @07:41PM (2 children)

    by VLM (445) Subscriber Badge on Monday July 09 2018, @07:41PM (#704687)

    The U.S. Department of Justice said that the company lost more than $1 billion in shareholder equity

    Wikipedia claims the prosecution's rose glasses only saw $800M. This fish story is getting longer and longer with each retelling.

    I was motivated to look up the company that "lost" $800M and with a lot of hand waving they only make $400M total revenue per year almost entirely not involving windmills.

    Methinks this is a typical scam where "we was gonna invent the iphone but big oil stole our water carburetor design so they owe us a billion buxs".

    "Uh, sure, I wouldn't complain if someone handed me a billion bucks" and getting maybe 10x the actual revenue lost in the award is a totally different scenario than literally stealing the money out of the bank.

    There as an old computer hacking case where some poor bastard was accused of causing a billion bux of damage to AT&T or whatever, the defense pointed out either they're lying (which they were) or they were lying on their SEC 10-Q forms by not declaring a billion dollar loss.

    I was motivated enough to pull their 10-Q from February... I suppose depending on GAAP accounting rules it depends when they file the loss, but they DO have company officers making sworn statements in the 10-Q that they did NOT lose a billion bux in the year 2017, anyway.

    I found a 10-K from them for 2010 and there's not a hell of a large difference between the 2010 10-K and the most recent quarterly 10-Q. Someone is lying, either the accountants (damn unlikely, but, hey, Enron did happen) or the court lawyers and PR people. My bet is on the lawyers.

    • (Score: 2) by PiMuNu on Tuesday July 10 2018, @04:26AM (1 child)

      by PiMuNu (3823) on Tuesday July 10 2018, @04:26AM (#704926)

      I always assumed that the "damages" were just "we had to apply a whole bunch of patches and renew licences for ancient software". Across a large organisation, I guess that means doing stuff like penetration testing (consultants), hiring a whole bunch of IT security people, etc. That turns into bazillions quite quickly (although a billion bazillions does sound like quite a bit). Of course, it's stuff they should have been doing anyway, but that doesnt stop the lawyers making claims...

      • (Score: 2) by VLM on Wednesday July 11 2018, @09:28PM

        by VLM (445) Subscriber Badge on Wednesday July 11 2018, @09:28PM (#705942)

        That turns into bazillions quite quickly

        Again, if you don't document billions of loss on your SEC reports, that's still financial fraud. Doesn't matter if you lose a million bucks on one hamburger or one buck each on a million hamburgers its the same financial white collar crime not to report it accurately.

  • (Score: 2) by deimtee on Monday July 09 2018, @09:23PM (1 child)

    by deimtee (3272) on Monday July 09 2018, @09:23PM (#704729) Journal

    The company paid an Austria-based employee of American Superconductor Corp. to steal its source code for software that powered wind turbines.

    While the software may have controlled the wind turbines, I'm fairly sure they were powered by wind. (or possibly the grid connection if you mean powering the control circuits.)

    --
    If you cough while drinking cheap red wine it really cleans out your sinuses.
    • (Score: 2) by Gaaark on Tuesday July 10 2018, @01:36AM

      by Gaaark (41) on Tuesday July 10 2018, @01:36AM (#704841) Journal

      God doesn't play with dice: he programs. Wind, windmills, galaxies....all programming.

      Dark matter? Virus.

      --
      --- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(1)