From: Milwaukee-Wisconsin Journal Sentinal

By Kathleen Gallagher

On an August morning, when most of Saudi Aramco’s employees were home preparing for a religious holiday, hackers unleashed a virus that erased the data on three-quarters of the state-owned Saudi Arabian oil company’s computers.

In a lesser-known case, hackers drilled into the systems of a major U.S. manufacturer and, 10 minutes later, emerged with the intellectual property for a project the company had spent $900 million and a decade developing.

The manufacturer never realized there had been a security breach, said Richard P. Imperiale, president of Uniplan Advisors Inc., Union Grove. Imperiale learned about that attack from a federal government employee.

Both incidents point to the growing problem of sophisticated hackers, often connected to foreign states, who are easily and quietly violating corporate and government security networks.

“A lot of companies believe their networks are secure and their data is safe, and they don’t even realize they’ve been compromised and all of this intellectual property is flowing out of the country,” Imperiale said. “It’s piracy at the highest level.”

Many big companies know there are regular breaches of their security walls, but don’t have good ways to monitor the activity and defend against it, Imperiale said.

“This is the next generation of opportunities,” he said.

Imperiale looks for defense contractors that have cyber defense practices for his microcap portfolio. Microcaps are companies with a market capitalization of about $50 million to $300 million. Even if U.S. defense budgets are cut, cyber security projects are expected to continue to be funded, given the magnitude of the problem, he said.

Companies that are developing cyber security products are expected to have opportunities to sell them to government and private industry, Imperiale said.

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