NSO chief steps down as Israeli spyware firm restructures

August 21, 2022 GMT
FILE - A logo adorns a wall on a branch of the Israeli tech company NSO Group, near the southern Israeli town of Sapir, Aug. 24, 2021. Shalev Hulio, the chief executive of embattled Israeli spyware maker NSO, has stepped down as part of a reorganization, the company announced Sunday, Aug. 21, 2022. NSO, maker of the powerful Pegasus phone surveillance software, has been connected to a number of scandals resulting from alleged misuse of its products by customers. (AP Photo/Sebastian Scheiner, File)
FILE - A logo adorns a wall on a branch of the Israeli tech company NSO Group, near the southern Israeli town of Sapir, Aug. 24, 2021. Shalev Hulio, the chief executive of embattled Israeli spyware maker NSO, has stepped down as part of a reorganization, the company announced Sunday, Aug. 21, 2022. NSO, maker of the powerful Pegasus phone surveillance software, has been connected to a number of scandals resulting from alleged misuse of its products by customers. (AP Photo/Sebastian Scheiner, File)
FILE - A logo adorns a wall on a branch of the Israeli tech company NSO Group, near the southern Israeli town of Sapir, Aug. 24, 2021. Shalev Hulio, the chief executive of embattled Israeli spyware maker NSO, has stepped down as part of a reorganization, the company announced Sunday, Aug. 21, 2022. NSO, maker of the powerful Pegasus phone surveillance software, has been connected to a number of scandals resulting from alleged misuse of its products by customers. (AP Photo/Sebastian Scheiner, File)
FILE - A logo adorns a wall on a branch of the Israeli tech company NSO Group, near the southern Israeli town of Sapir, Aug. 24, 2021. Shalev Hulio, the chief executive of embattled Israeli spyware maker NSO, has stepped down as part of a reorganization, the company announced Sunday, Aug. 21, 2022. NSO, maker of the powerful Pegasus phone surveillance software, has been connected to a number of scandals resulting from alleged misuse of its products by customers. (AP Photo/Sebastian Scheiner, File)
FILE - A logo adorns a wall on a branch of the Israeli tech company NSO Group, near the southern Israeli town of Sapir, Aug. 24, 2021. Shalev Hulio, the chief executive of embattled Israeli spyware maker NSO, has stepped down as part of a reorganization, the company announced Sunday, Aug. 21, 2022. NSO, maker of the powerful Pegasus phone surveillance software, has been connected to a number of scandals resulting from alleged misuse of its products by customers. (AP Photo/Sebastian Scheiner, File)

JERUSALEM (AP) — The chief executive of embattled Israeli spyware maker NSO has stepped down as part of a corporate reorganization, the company announced Sunday.

NSO has been connected to a number of scandals resulting from alleged misuse by customers of its flagship Pegasus phone surveillance software. Last year, the U.S. placed restrictions on the company, saying its tools had been used to “conduct transnational repression.” NSO denies any wrongdoing.

In a statement, the company said that CEO Shalev Hulio, one of its founders, would be stepping down. Yaron Shohat, the company’s chief operating officer, will lead the firm on an interim basis and manage the reorganization process while it searches for a new CEO.

A company official, speaking on condition of anonymity because they were not authorized to discuss the reorganization efforts, said Hulio is to remain with the company. The official added that 100 employees, or roughly 13% of NSO’s work force, would be dismissed.

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Pegasus allows operators to stealthily invade a target’s mobile device, giving them access to contacts, messages and movement history.

The company says that Pegasus is sold only to foreign governments after approval by Israel’s Defense Ministry as a tool for catching criminals and terrorists.

It says it has safeguards in place to prevent abuse, but critics say these safeguards don’t go far enough and NSO has acknowledged it cannot control whom its clients monitor. It says it does not have access to information that is collected.

Critics, including human rights groups and outside researchers, say customers have abused Pegasus to keep tabs on journalists, rights activists and political dissidents from Mexico to Saudi Arabia to the Israeli-occupied West Bank.

NSO does not identify its clients. But the company has acknowledged cutting off at least seven customers for abusing its technology. These reportedly have included authorities in the United Arab Emirates, Saudi Arabia and Mexico.

Sunday’s statement said firm’s reorganization will examine “all aspects of its business, including streamlining its operations to ensure NSO remains one of the world’s leading high-tech cyber intelligence companies, focusing on NATO-member countries.”

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NSO also faces lawsuits from Apple and Facebook accusing the Israeli firm of breaking into their products.

The U.S. Commerce Department’s decision to add NSO to its “entity list” has hurt the company by limiting its access to U.S. components and technology. NSO is challenging the designation.

The company has also been hurt by an Israeli decision late last year to tighten its supervision of cyber exports. That decision, made in the wake of criticism that Israel’s oversight of the digital surveillance industry was too lax, has reduced the number of countries that can purchase Israeli cyber software from over 100 to 37.