This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 5 Dumbest Things on Wall Street: May 6

5. Sony Makes World Safe for Hackers

For the hackers who haven't figured it out yet, Sony's (SNE - Get Report) online security code is up, up, down, down, left, right, left, right, triangle, X, start.

We're joking, of course. (Or maybe we're not...?) Regardless, Sony's sure making it look like it's as easy to get a PlayStation 3 user's credit card number and other personal information as it was to get extra lives in Contra about 25 years ago. This week, it was revealed that Sony's Swiss-cheese system allowed hackers access to yet another 24.6 million accounts, at least 12,700 non-U.S. credit or debit card numbers and expiration dates (although not the 3-digit security code on the back of credit cards), and about 10,700 direct debit records of certain customers in Austria, Germany, Netherlands and Spain.

The latest reported breach took place in the Sony Online Entertainment division -- which makes multiplayer online games including Free Realms and DC Universe Online -- and was directly tied to the infiltration of Sony's online PlayStation Network that the company copped to just a week ago and put roughly 77 million users' account information in jeopardy.

Sony's going to be begging for some extra lives after this one, especially after taking great pains to tell customers that Sony Online Entertainment and the PlayStation Network aren't part of the same network and that information stored in one wouldn't necessarily be vulnerable if the other was hacked. Oops.

The biggest blow to Sony's health meter, however, came when security expert Dr. Gene Spafford of Purdue University testified against Sony during a meeting of the House Subcommittee on Commerce, Manufacturing and Trade on Wednesday. Spafford told the committee that not only was Sony using outdated versions of Apache Web server software that were "unpatched and had no firewall installed," but that the problem was "reported in an open forum monitored by Sony employees" two to three months before the security breaches. Oops fatality.

This is nowhere close to the same scale as the hacker attack on Alliance Data Systems marketing firm Epsilon in April that exposed the e-mail addresses collected by 2,500 corporate partners including Chase (CCF), Best Buy (BBY) and TiVo (TIVO). The credit card information exposed by Sony's hack also falls well short of 46 million credit card numbers lifted when T.J. Maxx and Marshall's parent company TJX (TJX - Get Report) decided the best way to secure customers' information was with a smile and a polite handshake. It's far more annoying, however, as Sony's continued revelations of breaches and other assorted bungling -- which doesn't include hackers' development of a "jailbreak" device last summer that allowed them free access to online games usually reserved for developers -- haven't abated and haven't given PlayStation 3 users much confidence in the company's ability to keep information safe anytime soon.

Sony claims the breach and the service outages that followed have cost the company upwards of $20 million. Gamers who've spent the last week calling credit agencies, cutting up credit cards and changing passwords won't be weeping, especially in light of Sony's lax security.

TheStreet Says: Battling hackers with the technological equivalent of toothpicks bound by bubblegum and prayer is about as smart as trying to beat Killzone 3 with a character armed only with spitballs and harsh language.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAF $14.35 0.27%
C $51.22 -0.13%
CSCO $27.84 -0.43%
FSLR $50.58 -0.49%
SNE $26.42 -1.10%


Chart of I:DJI
DOW 17,081.89 -49.97 -0.29%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,796.6090 -42.0340 -0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs