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Investors have been calling for Sony CEO Howard Stringer to step down after the company has suffered from unprecedented attacks, triggered by its policies.  (Source: AP Photo)

The Sony chief called the hackers that struck his company "terrorists" and refused to accept responsibility for any part of the blame in the attacks.  (Source: Paramount Pictures)
Sony stock has plunged since attacks on anticipation of billions in losses

Tensions ran high in a conference call with Sony Corp. (TYO:6758) chief executive Sir Howard Stringer.  In recent months, following a series of attacks, the company’s stock has plunged 16 percent.  During the call, Mr. Stringer faced cries for his resignation and defended his company's behavior.

Sony lost over 100 million user records in the attacks.  Sony has stated that it expects to pay around ¥14B (about $172M USD) for the breach, or about $2 per record lost.  That is a tremendously unrealistic figure given that the 2010 average for such breaches from large corporations was $318M USD.

Indeed, Sony has already been hit by multiple class action lawsuits in the U.S. alone.  The most recent suit alleges that Sony laid off employees in the unit responsible for securing the PlayStation Network (PSN) just weeks before the breach.  Sony is accused of spending lavishly to protect its corporate networks, but maintaining little protections for its consumers' data.

Several prominent investors have called on Mr. Stringer to step down, as they say his tactics landed the company in this mess.

Mr. Stringer in the conference call to investors dodged these demands and shifted blame to the hackers, stating, "We believe that we first became the subject of attack because we tried to protect our IP (intellectual property), our content, in this case videogames."

He adds, "I think you see that cyber terrorism is now a global force, affecting many more companies than just Sony. If hackers can hack Citibank, the FBI and the CIA, and yesterday the video game company Electronics Arts, then it's a negative situation that governments may have to resolve."

Sony has a long history of resorting to questionable tactics in the name of intellectual property "protection".  

Back in 2005, the company installed root kits on users' computers via music CDs.  The botched copy protection effort allowed malicious hackers to infect unwitting users' machines.  As a result the company was forced to pay major damages in a successful class action lawsuit.

Likewise, Sony initially promoted Linux for the PlayStation 3, only to reverse position and turn its back on Linux PS3 users.  It could have merely cut support, but instead it actively tried to lock users with internet-connected consoles out of Linux, citing supposed "security concerns".  

And when hardware hacker George "GeoHot" Hotz posted information to restore support (via jailbreaking the console) Sony harassed him in U.S. court, abusing questionable judicial decision to invade the young man's privacy.  Worse yet, its ongoing legal harassment efforts look likely to land a young German in jail for bankruptcy, thanks to the costs of his legal battle with Sony.  Not intimidated, the German hardware expert says Sony will have to "kill" him to silence him

Sony has taken a brazen stance towards would be attackers.  A spokesperson for Sony Pictures spokesperson recently contacted DailyTech claiming LulzSec had posted misleading information about the number of customers exposed in a recent hack, essentially calling the hackers liars.  Faced with negative feedback that our story generated, the Sony Pictures spokesperson later contacted us in hopes that we might take down the story.  We refused to do so, though we agreed to obfuscate the spokesperson's identity to prevent them against personal retaliation. 

In the conference call, Mr. Stringer refused to acknowledge the calls for his resignation.  However, in previous remarks he has stated that Kazuo Hirai, 50, hired in April to be second-in-command at Sony, is in "pole position" to take over from him at an unspecified time.

Mr. Stringer says roughly 90 percent of PSN subscribers returned post-breach, though a number of customers remain angry.





"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates



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