The Biden administration on Thursday issued a warning that any potential acquisition of Israel's NSO Group - which developed highly advanced cyberweapons - by an American company could lead to a review process to assess whether the transaction poses any counterintelligence risks to the U.S. government.
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The National Security Council released the statement following reports that Robert Simonds, a Hollywood financier best known for producing several films starring Adam Sandler, is exploring a possible bid to take control of NSO’s assets, including Pegasus, the company’s spyware.
Simonds was recently appointed as a director of the Luxembourg-based holding company that controls NSO Group. According to a person familiar with the matter, Simonds discussed the possibility of exclusively providing NSO's highly sought-after technology to the "Five Eyes" intelligence alliance, consisting of the US, the UK, Canada, Australia, and New Zealand.
An NSC spokesperson said that the administration remained concerned that the proliferation of tools like those produced by NSO Group posed a “serious counterintelligence and security risk to US personnel and systems”. NSO was added to the blacklist in 2021 after the Biden administration announced it had found evidence that NSO was selling tools that "foreign governments use to suppress journalists, activists, academicians and diplomats."
The spyware is able to hack and control any phone without the user's knowledge and gives governments access to private conversations, pictures, locations and emails and can even turn any phone into a listening device by controlling its microphone remotely. According to a report in the UK's Guardian newspaper, any acquisition of the company could also face hurdles in Israel because of Defense Ministry regulations.
“Any US company should be aware that a transaction with a foreign entity on the entity list will not automatically remove the designated entity from the entity list. It may also prompt a review of whether the acquisition gives rise to a counterintelligence threat to the US government and its systems and information, whether other US equities may be at risk, and to what extent a foreign entity or government retains a degree of access or control,” the NSC spokesperson said.