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Sony hack proves costly

Movie release is canceled

NEW YORK — The unprecedented hack of Sony Pictures which a U.S. official says is linked to North Korea may be the most damaging cyberattack ever inflicted on an American business.

The fallout from the hack that exposed a trove of sensitive documents, and this week escalated to threats of terrorism, forced Sony to cancel release of the North Korean spoof movie “The Interview.” The studio’s reputation is in tatters as embarrassing revelations spill from tens of thousands of leaked emails and other company materials.

Federal investigators believe there is a connection between the Sony hack and the isolated communist nation, according to an official who spoke on condition of anonymity. The official was not authorized to openly discuss an ongoing criminal case.

North Korea has denounced the “The Interview” but earlier this month said the hack might have been carried out by sympathizers. The movie features a pair of journalists played by James Franco and Seth Rogen who are asked by the CIA to assassinate North Korea’s leader Kim Jong Un.

The attack is possibly the costliest ever for a U.S. company, said Avivah Litan, a cybersecurity analyst at research firm Gartner. “This attack went to the heart and core of Sony’s business and succeeded,” she said. “We haven’t seen any attack like this in the annals of U.S. breach history.”

A besieged Sony on Wednesday cancelled the Christmas Day release of the film, citing threats of violence by the hackers and decisions by the largest multiplex chains in North America to pull screenings. The hackers, who call themselves Guardians of Peace, had made threats of violence reminiscent of September 11th, 2001 if movie theatres showed the film.

Sony later said it has “no further release plans for the film,” seemingly ruling out a delayed theatrical or video-on-demand release.

“We are deeply saddened at this brazen effort to suppress the distribution of a movie,” Sony Pictures said in a statement.

White House spokeswoman Bernadette Meehan said the U.S. government had no involvement in Sony’s decision. She said artists and entertainers have the right to produce and distribute whatever content they want in the U.S.

How much the cyberattack will ultimately cost Sony is unclear. Sony faces trouble on several fronts after nearly four weeks since the hackers first crippled its computer systems and started dumping thousands of emails and private documents online.

In addition to vanishing box-office revenue from “The Interview,” there will be the cost of lawsuits by ex-employees angry over leaked Social Security numbers and other personal information. And there are actors who might decide to work at another studio.

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