A U.S. judge on Tuesday ruled that China’s ZTE Corp 000063.SZ, 0763.HK, a top telecommunications equipment maker, should be allowed to end its five-year probation from a 2017 guilty plea.

The ruling came on the final day of the company’s probation for illegally shipping U.S. technology to Iran.

It marks the end of a criminal case against ZTE, though it is still subject to a 2018 settlement agreement with the U.S. Commerce Department.

The company asked that trading in its shares resume at 0500 GMT in Shenzhen and Hong Kong after requesting a halt following the decision by U.S. District Judge Ed Kinkeade in Texas. The company’s shares declined earlier this month after word of a possible probation violation surfaced.

ZTE had been accused of violating probation over an alleged conspiracy to commit visa fraud. According to an indictment unsealed last March, a former ZTE research director and a Georgia Institute of Technology professor allegedly conspired to bring Chinese nationals to the U.S. to conduct research at ZTE from at least 2014 through 2018 while on J-1 visas sponsored by the university.

While ZTE has not been charged in the visa case, which is pending in Atlanta, Georgia, Kinkeade held a hearing in Dallas last week on the fraud allegation as a possible violation of ZTE‘s probation.

In his Tuesday ruling, the judge found ZTE was legally responsible for the actions of the former ZTE director.

But he decided to not take any further action against ZTE, which had already reached the maximum term of probation and, ZTE argued, had already been fined the maximum as well.

As part of its 2017 guilty plea deal, ZTE paid the U.S. $892 million.

There was an “open question about legal tools left for the court,” the judge wrote.

Despite the favorable ruling, the judge encouraged the government to pursue any reasonable charges and criminal or civil penalties against the company, especially for export compliance matters.

The visa issue was not the first problem that surfaced for ZTE since the plea deal. In 2018, the U.S. Commerce Department found ZTE made false statements about disciplining executives tied to the illegal shipments to Iran and, as a result, issued a total ban on the company buying U.S. components.

ZTE, crippled by the move, paid a $1 billion penalty and agreed to change its leadership and cooperate with a second 10-year monitor, as part of a Commerce Department agreement lifting the ban.

The judge took action in 2018 over the false statements, too, extending ZTE‘s probation and court-appointed monitor from three to five years.

In his Tuesday ruling, the judge noted that ZTE argued the visa-fraud related events occurred more than three years ago, and that new leadership had brought an improved export compliance program.

“The Company has made strides,” the judge said, adding that ZTE‘s export control and compliance programs were effectively “nonexistent” when it was originally sentenced.

He said he considered ZTE‘s compliance a mitigating factor, but that its record of compliance could be summarized in one word: “sometimes.”

ZTE in a statement to Reuters said it was “proud of the significant improvement in the company’s compliance program and culture.” It said the improvement had been acknowledged over the years.

Evans Rice, a lawyer for ZTE, said in court last week that, in 2020, the court-appointed monitor had recognized “a sea change” in the company’s commitment to compliance and cooperation.

The U.S. Department of Justice did not immediately respond to a request for comment. Nor did the Commerce Department respond to a request for comment after hours.

The professor charged in the visa case, Gee-Kung Chang, has pleaded not guilty. The status of the former ZTE research director, Jianjun Yu, is unclear. ZTE said he left the company in 2019.

The case against ZTE was the first of a series of U.S. government actions against major Chinese tech companies that caused tensions in U.S.-China relations.

It was followed by a case, still pending, against Huawei Technologies Co Ltd HWT.UL, the hobbled Chinese telecommunications equipment giant, which was also placed on a U.S. trade blacklist in 2019 for activities contrary to U.S. national security or foreign policy interests. – Reuters

WASHINGTON – Okta Inc OKTA.O, whose authentication services are used by companies including Fedex Corp FDX.N and Moody’s Corp MCO.N to provide access to their networks, said on Tuesday that it had been hit by hackers and that some customers may have been affected.

The scope of the breach is still unclear, but it could have major consequences because thousands of companies rely on San Francisco-based Okta to manage access to their networks and applications. Read full story

Chief Security Officer David Bradbury said in a blog post that a customer support engineer working for a third-party contractor had his computer accessed by the hackers for a five-day period in mid-January and that “the potential impact to Okta customers is limited to the access that support engineers have.”

“There are no corrective actions that need to be taken by our customers,” he said.

Nevertheless, Bradbury acknowledged that support engineers were able to help reset passwords and that some customers “may have been impacted.” He said the company was in the process of identifying and contacting them.

The nature of that impact wasn’t clear and Okta did not immediately respond to an email asking how many organizations were potentially affected or how that squared with Okta‘s advice that customers did not need to take corrective action.

The company’s shares were down 1.3% at $167.14 in late afternoon trading, off earlier lows.

On its website, Okta describes itself as the “identity provider for the internet” and says it has more than 15,000 customers on its platform.

It competes with the likes of Microsoft Corp MSFT.O, PingID, Duo, SecureAuth and IBM IBM.N to provide identity services such as single sign-on and multifactor authentication used to help users securely access online applications and websites.

‘BE VERY VIGILANT’

Okta‘s statement follows the posting of a series of screenshots of Okta‘s internal communications by a group of ransom-seeking hackers known as Lapsus$ on their Telegram channel late on Monday.

In an accompanying message, the group said its focus was “ONLY on Okta customers.”

Lapsus$ responded to Okta‘s statement on Tuesday by saying the company was trying to minimize the importance of the breach.

Some outside observers weren’t impressed with Okta‘s explanation either.

“In my opinion, it looks like they’re trying to downplay the attack as much as possible, going as far as directly contradicting themselves in their own statements,” said Bill Demirkapi, an independent security researcher.

Dan Tentler, the founder of cybersecurity consultancy Phobos Group, earlier told Reuters that Okta customers should “be very vigilant right now.”

There were already signs that Okta customers were taking action to revisit their security.

Web infrastructure company Cloudflare issued a detailed explanation of how it reacted to the Okta breach and saying the company did not believe it had been compromised as a result.

FedEx said in a statement that it too was investigating and “we currently have no indication that our environment has been accessed or compromised.” Moody’s did not return a message seeking comment.

Lapsus$ is a relatively new entrant to the crowded ransomware market but has already made waves with high-profile hacks and attention-seeking behavior.

The group compromised the websites of Portuguese media conglomerate Impresa earlier this year, tweeting the phrase “Lapsus$ is now the new president of Portugal” from one newspaper’s Twitter accounts. The Impresa-owned media outlets described the hack as an assault on press freedom. Read full story

Last month, the group leaked proprietary information about U.S. chipmaker Nvidia Corp NVDA.O to the Web. Read full story

More recently the group has purported to have leaked source code from several big tech firms, including Microsoft. In a blog post published Tuesday and devoted to Lapsus$, the software firm confirmed that one of its accounts had been compromised, “gaining limited access.”

The hackers did not respond to a message left on their Telegram group chat seeking comment. – Reuters