AABA Altaba Inc

By Aruna Viswanatha 

Federal authorities have charged four men, including two officers from Russia's spy agency, with hacking computer systems at Yahoo Inc. and stealing personal data that affected hundreds of millions of Yahoo users, in the first such case to directly target the Russian government.

Two of the men are officers at Russia's secretive Federal Security Service and protected, directed, facilitated, and paid others to collect information through computer intrusions in the U.S. and elsewhere, authorities said.

Of the four charged, one was taken into custody on Tuesday in Canada, authorities said. The other men are believed to be in Russia. There is no extradition treaty between Russia and the U.S., so U.S. authorities would only be able to get them in custody if they travel overseas to another country that is willing to send them to the U.S.

Hackers compromised Yahoo's servers in two separate incidents, stealing data on more than 1 billion accounts during a 2013 incident. A separate 2014 incident, which Yahoo had previously liked to "state-sponsored" hackers compromised data on more than 500 million accounts.

The compromised data includes Yahoo addresses linked to more than 150,000 members of the federal government and U.S. military, according to an analysis by the security firm InfoArmor Inc.

The hacking incidents, both among the largest-ever reported thefts of personal data, presented a major stumbling block to Verizon Communications Inc.'s efforts to acquire Yahoo's core business assets. Yahoo disclosed both breaches months after Verizon made its initial bid on the internet company in July 2016. Last month, the companies revised the terms of their deal, with Verizon now paying $4.5 billion -- a $350 million price reduction -- and both companies agreeing to split any future costs related to the breaches.

Yahoo executives were apparently unaware of the 2013 breach until December of last year, but the company knew of the 2014 incident soon after it occurred. It is unclear why Yahoo waited approximately two years to disclose that breach, and this delay is now the subject of an investigation by federal authorities, including the Securities and Exchange Commission.

Last month, Yahoo's top lawyer, Ronald Bell, resigned in the wake of the hacks, and Yahoo's board elected not to award Chief Executive Marissa Mayer her 2016 cash bonus and accepted her offer to forgo her 2017 equity awards.

A Yahoo board investigation blamed the mishandling of the hacking incident on "failures in communication, management, inquiry and internal reporting" and a "lack of proper comprehension," the company said in an SEC filing earlier this month.

Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com

(END) Dow Jones Newswires

March 15, 2017 12:02 ET (16:02 GMT)

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