http://www.reuters.com/article/us-stjude-cyber-idUSKCN1101YV
n" style="transform: translate3d(0px, 0px, 0px);">he stock of pacemaker manufacturer St. Jude Medical Inc (STJ.N) fell sharply on Thursday after short-selling firm Muddy Waters said it had placed a bet that the shares would fall, claiming its implanted heart devices were vulnerable to cyber attacks.
St. Jude, which agreed in April to sell itself for $25 billion to Abbott Laboratories (ABT.N), said the allegations were false. St Jude shares closed down 4.96 percent, the biggest one-day fall in 7 months and at a 7.4 percent discount to Abbott's takeover offer.
Muddy Waters head Carson Block said the firm's position was motivated by research from a cyber security firm, MedSec Holdings Inc, which has a financial arrangement with Muddy Waters. MedSec asserted that St. Jude's heart devices were vulnerable to cyber attack and were a risk to patients.
A MedSec report warned of two primary hacks on St. Jude pacemakers and defribillators: One that could cause implanted devices to pace at potentially dangerous rates and one that drains their batteries.
MedSec approached Muddy Waters about three months ago and the two struck a deal under which Block agreed to hire MedSec as a consultant, pay it a licensing fee for research and a percentage of any profits from the investment, Block told Reuters.
Reuters was not able to confirm the allegations by Block and MedSec, a firm founded 18 months ago focusing on cyber vulnerabilities in the healthcare industry. The allegations were detailed in a report published on the Muddy Waters website.
The Department of Homeland Security and the Food and Drug Administration, which work together to investigate and remediate life-threatening cyber vulnerabilities in medical equipment, declined comment on St. Jude.
Josh Corman, co-founder of I am the Cavalry, a group that has worked to establish standard procedures for privately disclosing vulnerabilities to manufacturers, said he was surprised St. Jude had been singled out. He said he was aware of other non-public research showing other device makers have cyber vulnerabilities.
n" style="transform: translate3d(0px, 0px, 0px);">he stock of pacemaker manufacturer St. Jude Medical Inc (STJ.N) fell sharply on Thursday after short-selling firm Muddy Waters said it had placed a bet that the shares would fall, claiming its implanted heart devices were vulnerable to cyber attacks.
St. Jude, which agreed in April to sell itself for $25 billion to Abbott Laboratories (ABT.N), said the allegations were false. St Jude shares closed down 4.96 percent, the biggest one-day fall in 7 months and at a 7.4 percent discount to Abbott's takeover offer.
Muddy Waters head Carson Block said the firm's position was motivated by research from a cyber security firm, MedSec Holdings Inc, which has a financial arrangement with Muddy Waters. MedSec asserted that St. Jude's heart devices were vulnerable to cyber attack and were a risk to patients.
A MedSec report warned of two primary hacks on St. Jude pacemakers and defribillators: One that could cause implanted devices to pace at potentially dangerous rates and one that drains their batteries.
MedSec approached Muddy Waters about three months ago and the two struck a deal under which Block agreed to hire MedSec as a consultant, pay it a licensing fee for research and a percentage of any profits from the investment, Block told Reuters.
Reuters was not able to confirm the allegations by Block and MedSec, a firm founded 18 months ago focusing on cyber vulnerabilities in the healthcare industry. The allegations were detailed in a report published on the Muddy Waters website.
The Department of Homeland Security and the Food and Drug Administration, which work together to investigate and remediate life-threatening cyber vulnerabilities in medical equipment, declined comment on St. Jude.
Josh Corman, co-founder of I am the Cavalry, a group that has worked to establish standard procedures for privately disclosing vulnerabilities to manufacturers, said he was surprised St. Jude had been singled out. He said he was aware of other non-public research showing other device makers have cyber vulnerabilities.