NSO sources: We shut down misuse of cybersystems in real time

When NSO Group has noted that any of its clients have misused its cybersystems, it has shut them down in real-time, sources close to the company have told The Jerusalem Post.

The disclosure came as the cyber-intelligence firm announced on Thursday that its management team has united with European private equity firm Novalpina Capital to acquire global private equity firm Francisco Partners’ stake in the company.

How will the change impact the company’s future direction?

NSO Group describes itself as a developer of technology that helps government intelligence and law enforcement agencies prevent and investigate terrorism and crime to save lives.

But it has repeatedly found its way into the news with allegations claiming its products were used by the Saudis to track and trap murdered journalist Jamal Khashoggi as well as against Mexican and Qatari journalists.

There have also been allegations that Black Cube, which employs a variety of ex-Israeli intelligence agents, has acted on NSO’s behalf to give it leverage in the lawsuits filed against it.

In a recent interview with Yediot Aharonot, NSO CEO Shalev Hulio unequivocally denied that Khashoggi was targeted by any of his company’s products or technology, including its listening, monitoring, location tracking and intelligence collection.

Hulio also detailed recent attempted terror attacks in Europe that were intercepted because of NSO’s technology and the exposure of an Iranian-Hezbollah plot to hold Qatari nationals for ransom.

Former Israel National Cyber Authority chief Buki Carmeli, who also consults for NSO, has told the Post that NSO has been around for a while and routinely “gives technology to governments” to fight terrorist groups and drug cartels by hacking their communications.

At the same time, he has said that adversaries to Israel and to Western countries “are moving forward in the cyber area” and that private-sector allies, like NSO Group, are crucial to stay ahead of them.

Crucially, sources close to NSO explained to the Post that it had not merely terminated contracts for any clients – read government intelligence agencies – who had misused its technology months after an incident. Rather, sources said that NSO has the ability to cut off the misuse of its technology in real time as soon as it notes a deviation from the very strict contract it insists on.

Further, NSO’s tools cannot be used for mass surveillance, but only for very selective targets and small operations.

The flip side of all of this, of course, is that for those who believe NSO’s technology was misused in the Khashoggi incident, it means that the company might have known more about it in real time than revealed to date.

According to sources close to NSO, Thursday’s move does not merely exchange one private equity investor for another, but increases the management-employees’ interest in the company to around 50%.

The sources said that the new ownership lineup would give management greater strategic freedom to pursue its plans to expand from its core business of serving intelligence agencies.

At the next stage, NSO hopes to serve militaries as well as foreign law enforcement authorities to the extent that those authorities have the capacity to use its products.

Thursday’s deal valued the company at approximately $1 billion. Francisco Partners had acquired NSO in 2014 for around $130 million. NSO’s press release on Thursday said it had revenues of $250 million in 2018, and dozens of licensed customers.

Sources close to the company said that it would continue its policy of only selling to countries approved by both the Israeli Defense Ministry and an ethics panels which includes external advisers. A source added that NSO has even turned down offers which the Defense Ministry had approved.

Regarding all of the negative press coverage trying to connect NSO to various scandals, the source said that this was unpleasant and that their employees have families and care about their reputations. However, sources close to NSO also admitted that some of the notoriety achieved from people treating the company as having mythical abilities may have also helped the business, which reportedly had its best year in 2018.