The Buzz: April 7, 2003

Several security-related April Fools' Day hoaxes satirized the security industry last week.

Security An April Fool

Several security-related April Fools Day hoaxes satirized the security industry last week. The pranks included phony vulnerability advisories warning that the end of the world is near to a "product announcement" for a tool that automatically strikes back at hackers.

A bogus RFC (Request for Comment) published by security expert Steve Bellovin, of AT&T Labs Research, had the most success.

Titled "RFC 3514: The Security Flag in the IPv4 Header," the document proposed using an unused bit in the IP header to define whether a given packet is "evil" or "benign." Evil packets (sent by attackers) must have this bit set to 1; benign packets must have the bit set to 0.

Members of the security mailing lists on which the document was distributed appear to have fallen for the gag, mystifying Bellovin, who has jokingly referred to the evil bit in IP headers for years. "What can I say? Its clearly an April 1 joke," he said.

Intels Barrett Gained $17.6M in Options

Intel CEO Craig Barrett gained $17.6 million from exercising stock options last year, according to a regulatory filing. In addition, Barretts salary for the year increased to $610,000 from a $575,000 salary the year before. His bonus remained for the second year running at $1.1 million. Co-founder and Chairman Andy Grove earned $431,000 in salary last year, down from $525,000 in 2001, plus a bonus of $755,500 and other compensation of $112,600, for a total of $1.3 million, compared with $1.75 million the previous year.

In other corner office news, Eastman Kodak last week named former Hewlett-Packard executive Antonio Perez as president and chief operating officer. Perez, a 25-year HP veteran, was president of the companys consumer business and oversaw laptops, digital cameras and its $10 billion-a-year printer business.

eBay Charged With Violating Patriot Act

A federal prosecutor has alleged that eBays PayPal payment service violated anti-terrorism laws for providing payment services to online gambling companies, according to the companys 10-K filing.

The company received a letter late last month from the U.S. Attorney for the Eastern District of Missouri that contended PayPals "services to online gambling merchants violated ... the USA Patriot Act, which prohibits the transmission of funds that are known to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity."

In the filing, eBay said that PayPal, acquired by eBay in October, exited from the business of processing payments for online gambling merchants in November, noting that about 6 percent of PayPals revenues last year were derived from this business. The prosecutor said that eBay could be forced to forfeit the money it received in connection with the alleged illegal activity and that it could also be criminally liable.

I2, Gateway, Quest to Be Late in Filings

Three tech companies are in the process of redoing their financial reports. I2 Technologies, which is already reauditing its 2000 and 2001 results, expanded the reaudit to 1999. Officials said the company is now the subject of a formal investigation by the Securities and Exchange Commission. I2 said the reauditing will lead to a delay in its 2002 Form 10-K filing, which may result in a delisting of the companys stock from the Nasdaq National Market.

Gateway also said last week it will delay filing its 2002 annual report by up to 15 days because of plans to restate 2000 and 2001 revenue and costs of goods sold as it reviews transactions with AOL.

Telephone company Qwest, which has said it would restate about $2.2 billion in revenues, last week said it wont file its 2002 annual report on time since its results still must be audited.