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NSO Group CEO to step down amid sanctions, scandal

The developer of the infamous Pegasus spyware says it will focus on selling to NATO countries rather than authoritarian states.
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Francis Scialabba

· 3 min read

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The co-founder and CEO of Israeli cyberintelligence firm NSO Group—developer of the notorious Pegasus spyware, which NSO sold to authoritarian governments around the world—is stepping down amid a purported reorganization.

According to the Guardian, Shalev Hulio is leaving the role and will be replaced in that capacity by current COO Yaron Shohat. In a statement to the paper, an NSO spokesperson referred to Shohat as the new “lead” and said that the company will now be “streamlining its operations” and “focusing on NATO-member countries.” The Washington Post reported that the company fired around 100 of its 700 employees.

The news follows NSO’s dizzying array of scandals. Here are just a handful:

  • There is evidence that Pegasus spyware was used to target Saudi dissident Jamal Khashoggi, a US-based journalist, before he was brutally murdered in a Saudi embassy in 2018.
  • Extensive investigations assert Pegasus’s role in state terror campaigns directed against dissidents, human rights activists, academics, journalists, and others in over a dozen countries.
  • NSO allegedly used WhatsApp as a malware vector, for which Meta is suing the group.

But the company has been in particular turmoil since November 2021, when the US Commerce Department slapped it on the “Entity List,” which is a registry of individuals and organizations that face severe restrictions on their ability to do business stateside, as well as restrictions on their access to specified categories of US-made tech or intellectual property, regardless of where it falls on the supply chain.

The Entity List placement reportedly put NSO at risk of default on $500 million in debt, and a Financial Times report in June 2022 claimed Hulio pitched the firm’s NYC-based majority owners on resuming sales to its more infamous clients.

In July 2022, a ProPublica report sourced to public records showed NSO had dropped six figures that year alone on lobbying, public relations, and other efforts to get off the list. The firm had reportedly been entertaining an acquisition offer from defense contractor L3Harris Technologies until the White House warned it might consider such a sale a pretext to violate “US export control measures or sanctions,” as well as a counterintelligence risk.

Hulio has stepped down before. NSO co-president Isaac Benbenisti briefly assumed the CEO role last year, but left after just two weeks due to the US sanctions.—TM

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Top insights for IT pros

From cybersecurity and big data to software development and gaming. Our IT Brew newsletter delivers the latest news and analysis of trends shaping the IT industry, like only The Brew can.