Arvixe IMPLOSION - Hacked, Customer Database Overwritten, Workers Fired, etc.

Background

We covered the original Arvixe acquisition by publicly traded hosting giant Endurance International Group (NASDAQ: EIGI http://finance.yahoo.com/q?s=EIGI) last November:



"On October 31, 2014, the Company acquired Arvixe, a California-based web presence provider to small and medium-sized businesses for a purchase price of $22.0 million, which consisted of a cash payment of $17.6 million at the closing with the remainder payable 12 months following the closing."

Recently, EIG has been busy moving customers to DCs they have space in for other owned companies. Threads like this one: http://www.webhostingtalk.com/showthread.php?t=1516593 have EIG/Arvixe dropping customers and failing like a n00b summer host with imaginary R1Soft backups that never existed.

Back on September 16, a curious thread on WHT: http://www.webhostingtalk.com/showthread.php?t=1513722

“... This has been going for 14 days now, and since 3 days back, arvixe stopped answering our phone calls (at one point the put us on hold for 1 hour 30 minutes, and we got tired and hang up), they have not updated the status of the ticket, and they are not answering our emails...”

Which lead me to ask, what is going on in Arvixe / EIG? Huge company, tons of employees, days of wait, no phones happening, idle tickets, etc. Buyouts with EIG seem to be a fail formula. Migrating DCs usually tends to go bad and shred customers and income. Few legitimate reasons to buy customers and then migrate them.

Yesterday I noticed in passing, an Arvixe admin out there looking for help and declaring himself an Arvixe person clearly in public.

http://www.webhostingtalk.com/showthread.php?t=1516343

Raised my brows a good bit more.

The Hack 9/28/2015

Early morning, at approximately 6AM US Eastern time on September 28, 2015, Arvixe was hacked.

Arvixe pulled their client billing area offline and it just displayed a message about the 'functionality not available'. This happened around 7AM US Eastern time.

During the hack someone overwrote the client database with one single record over top of everyones account. Assuming others saw the data error then. Abubakar appeared as the owner of all accounts and a Turkish IP was part of the details mass replaced on the accounts.

Arvixe was able to restore the client database from backups, unlike that client yesterday at Arvixe who lost their site and database and the R1Soft backups included for some reason failed to be accessible: http://www.webhostingtalk.com/showthread.php?t=1516593.

EIG management has kept the matter hushed. Have you seen it in the media or on the forums? Not until now.

'Employees' Fired

Lots of people in these communities know that Arvixe was always bad about worker status. Simply, they hired people as workers with set schedules, yet called them contractors (1099 status in US). They did this to maximize profits and minimize liabilities. Taxes cost money and involve proper paperwork.

Allegedly Arvixe had 300 workers. Those in the US allegedly were W2 employees, although Arvixe had US workers always as 1099 contractor status in the past (I've spoke to probably a half dozen former workers misclassified as 1099 and from the US). All workers abroad (and they had lots) were contractors.

In the past month a big group of the workers were let go from Arvixe.

September 30, 2015, all the remaining workers are being shown the door.

Less than two dozen have been offered work at ASO (AsmallOrange).

ASmallOrange

It appears that the Arvixe customers are being squeezed into a ASmallOrange. The former Arvixe customers allegedly will be placed under the management of AsmallOrange. Whether or not EIG is going to kill off the Arvixe brand remains to be seen. Doubt around if they will based on track record of keeping the brands and perceived name recognition and brand value (read inbound search derived sales leads from buyers blissfully unaware of Arvixes sins and failures).

ASmallOrange is hiring: https://asmallorange.com/why/careers/. The jobs offered are listed as Austin, Texas. However, they allude to being a diverse off location workforce also:

“.. To keep our global employee base connected, and foster our sense of community, we have many different ways of interacting with one another. We've found that team meet-ups and frequent "Town Hall" meetings via webcam (among other things) are great ways to get everyone up to speed. Employees outside of Austin who live close to each other are encouraged to get together on a regular basis as well. Our goal is for our employees to be equally as satisfied as our customers...”

“... Based in Austin, TX and with a remote workforce spread across the globe...”

 Unclear if ASmallOrange has also been skirting the IRS and employment overhead on worker status. I suspect we are about to find out and find a whole lot more.

It should also be known that an interesting shaving of personal enrichment happened recently to the CEO of EIG, Hari Ravichandran:

Quote said:

On September 18, 2015, the Board of Directors (the “Board”) and the Compensation Committee of the Board (the “Committee”) of Endurance International Group Holdings, Inc. (“Endurance” or the “Company”) approved the grant of a performance-based restricted stock award (the “Performance-Based Restricted Stock Award”) to Hari Ravichandran, the Company’s Chief Executive Officer. In connection with the Performance-Based Restricted Stock Award, and in order to better align Mr. Ravichandran’s compensation with corporate performance, Mr. Ravichandran and the Company have amended his employment agreement with the Company to reduce his base salary from $750,000 to $200,000 and to reduce his annual cash bonus with respect to calendar years 2015, 2016 and 2017 to zero unless otherwise determined by the Board or the Committee.

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The Board of Directors at EIG slashed his annual income from $750k to $200k and eliminated all cash bonuses.  In return, he vests into EIGI shares quarterly, as long as he remains employed there and scheduled for 2015-2017.  This ties his own personal compensation to stock performance.

Today he wins with the shares, but liquid money always is king and no one can predict the future, especially where you have the institutional Wolves of Wall Street owning 85% of your company shares.

Per Yahoo Finance: http://finance.yahoo.com/q/mh?s=EIGI+Major+Holders

% of Shares Held by All Insider and 5% Owners:

10%

% of Shares Held by Institutional & Mutual Fund Owners:

86%

% of Float Held by Institutional & Mutual Fund Owners:

95%


Not a very 'PUBLIC' traded company when 95-96% of shares being held by such a few firms / trusts / funds / key people.

Ouch... That is horrible.

EIG has always made me a little uneasy, no matter the situation. Something always seemed a little off about them, a little bit fishy.

This explains everything.

Quote said:

Simply, they hired people as workers with set schedules, yet called them contractors (1099 status in US). They did this to maximize profits and minimize liabilities. 

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So who is the braindead fucktard that thought cheating the IRS (and Arvixe workers) by misclassifying employees as contractors would minimize the company's potential liabilities?  (educational link for anyone else thinking of doing something that stupid: https://blog.workmarket.com/workforce-managers/11-consequences-of-misclassifying-your-1099contractors.html )

Quote said:

Not a very 'PUBLIC' traded company when 95-96% of shares being held by such a few firms / trusts / funds / key people.

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That 95% institutional/mutual funds/insider ownership is fairly typical of many large publicly traded companies.  A few Dow components: Nike 85%, Microsoft 77%, Visa 94%, UnitedHealth Group 94%, United Technologies 83%

DomainBop said:

Quote said:

Not a very 'PUBLIC' traded company when 95-96% of shares being held by such a few firms / trusts / funds / key people.

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That 95% institutional/mutual funds/insider ownership is fairly typical of many large publicly traded companies.  A few Dow components: Nike 85%, Microsoft 77%, Visa 94%, UnitedHealth Group 94%, United Technologies 83%

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Well, his point would technically stand with those companies as well.

Oh I know we have these companies with high percentage instutional held.  Calling it public is a joke though at those rates.  Should be rules in the market to prevent such lack of diverse share ownership and consolidation.

That list of Dow components... that's a list of companies I won't buy from and haven't in a very long time time.

Public traded these buffoons are not.  Really bastardizing language and risking the businesses.  Hostile takeovers happen and activist share holder revolts when holding far less share control.

May I propose that these companies are sophisticated wealth redistribution mainly?  They are financing retirements and pensions (non productive lot living off of otherwise idle money) from the productivity of and at the detriment often to the working age citizens.  Be it headcount slashes, be it mergers and acquisitions where they kill jobs and economic viability and reduce competition, etc.

Good amount of offshore export of jobs to foreign lands and money laundering abroad by these companies as well.

You will find financiers like Vanguard Group mucked up in most of these high instutitionally held companies.

About Nike:

Quote said:

On May 12, 1998 Nike's CEO Phil Knight gave a speech at the National Press Club where he spoke of Nike’s reasons for moving factories out of the United States and into mainly third world countries in Asia. "During the 1990s, all our experiences have caused us to really believe in the benefits of international trade. The uplifting of impoverished people, the better values for consumers in industrialized nations, and most of all, the increased understandings between peoples of different cultures."

That seems to be the morality and mindset of a typical globalist, someone who advocates a policy of placing the interests of the entire world above those of individual nations. As one major American hedge fund manager had privately admitted: "The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade."

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Whole burning heap over here: http://www.dailykos.com/story/2013/06/28/1219604/-Record-Earnings-but-Offshoring-is-still-Hurting-Workers

... and it's not about American way of life or exceptionalism.   Matter is about the law breaking, and rubber stamp allowing such companies to work as anti competitive bulldozers while taking money from the US.

I am all for Nike making goods in Vietnam, just make sure they are proportionally selling their goods there.  Nationalize income there and pay up there too.

We all lose with companies like this on the perch.  Higher prices on goods at your local retail, crimes of desire around such products (some of them), lack of marketplace competition or even attempts since 800 lb gorilla is a bully, arm twisting of government to regulate the life out of any viable small competitor upstart.

It becomes that to compete with these guys that they force you to be a scumbag just to survive and attempt the competition.

Anti-competitive nature of EIG is reaching high level.  They had 3.4 million customers originally when went public.  Were north of 4.x customers more recently.    Bigger issue is how they are parked on results together in search.  That's a Google problem and algorithm fail.  Reason again to not support the mega shit co's like Google.

Reading through the comments my initial thought was: Heck they are just bashing capitalism and they are right.
Corps are growing - like impires in former times - and at some point they think they can do whatever they want. Look at VW and #dieselgate and tell me that this has not the same roots like EIG or Goldman Sachs.

Growing has limits on a finite world, so at some point qualitiy, or higher goals should be choosen. Not that shady road to kill the other competitors or cheating the system that allowed the company to grow.

Something I am pissed off on every statement coming from corps and tea-party like political jokers. Enjoying the benefits of a society and afterwars (after you are big/rich enough) trying to cheat that same society to secure that someone else does not get the same benefits. The nation has to support this and that, we need more state funds here, military there - but hell we have to get rid of that same state if we talk about taxes and regulations.
I would call that schizophrenic disorder if you want to cut the hand that was feeding you - or just want to have a single-side coin.

wlanboy said:

 Look at VW and #dieselgate and tell me that this has not the same roots like EIG or Goldman Sachs.

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I will raise you and say look at Google and what it has become!

The Doctor of Bad Hosting companies is back

Greetings to my friends at EIG / Arvixe who are watching this thread and the WHT readers that come by.

Back on the Arvixe / EIG topic.   They claimed their was no hack.  There however was, like I've said.  Since I detest MEGA CORP coverups, pending data to stuff in EIG's mouth and make them do a 180. Let me cut off the excuse path, a hack even perpetrated from internal systems is still a hack.  The data was dumped bubba.

Allegedly the hack involved a SQL exploit. All management accounts were compromised. The logins apply to other systems there like GlolbalSign, LogicBoxes, Softlayer, cPanel, etc.

How did Arvix / EIG mask the hack to customers? Like this:

Quote said:

Dear Valued Customer,We recently experienced a technical issue with one of our core servers, in which the server experienced an outage that resulted in corruption of some of the data for your account.  Our team has recovered the server, but unfortunately we were not able to fully restore all of the data on it.To ensure uninterupted service on your account we would like to ask you to log in to your account to update your account information.  We apologize in advance for this inconvenience, our team explored all options to fix this issue, without asking you to have to log in, but we are unable to remedy the situation without your assistance.Please log in to your billing control panel directly at https://www.arvixe.com/billing.php to update your account information.We apoligize for this inconvenience, and can assure you that at no time was your account information at any risk, we are simply not able to recover it after a server malfunction.Should you have any questions, please do not hesitate to contact us, and thank you in advance for your attention to this matter and for your business.Sincerely,Arvixe Management

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Maybe this will refresh the dishonest minds at Arvixe / ASmallOrange / EIG... Remember this account?  It was every record in that hacked database.

Quote said:

Abubakar Ramzan

Organization:

3star Trading

Address:

G.T. Road

City:

Gujranwala

State/Province:

Punjab

Country:

Pakistan

Zip:

54450

Phone:

03217487000

E-mail:

your_name@your_domain.com

Hear From:

Friend

Referrer:

https://www.google.com.tr/

Landing Page:

/

Used Coupon:

türkiye

Affiliate Info:

arvand (100)

IP Address:

85.105.250.85

IP Address Reverse:

85.105.250.85.dynamic.ttnet.com.tr

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I have been using shared hosting from Arvixe for several years, and service has declined steadily over that period. They have broken all the promises originally made when I signed up. The drop in quality was especially noticeable after the EIG acquisition. After Arvixe changed its phone support a few weeks ago from 24x7 to 10x5 (a 70% reduction) I started looking for alternatives. I am paid up with Arvixe through June. When I find the right service, I won't wait - I will throw away the balance on the Arvixe account. I guess I had better run another backup and change my account passwords, again. 

I have not received any email messages from Arvixe regarding the security breach or the reduction in phone support hours. Even though I signed up with the expectation of receiving full-time phone support, they haven't offered to credit my account for the change, not that I would expect them to do it.

This is sad for all of their clients to have to deal with and it seems like they aren't doing a lot to keep clients updated (on Facebook atleast). I hope my observation is wrong but it appears this way.

Evolve Web Hosting said:

This is sad for all of their clients to have to deal with and it seems like they aren't doing a lot to keep clients updated (on Facebook atleast). I hope my observation is wrong but it appears this way.

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Yep they are not giving any updates because EIG moto is secrecy, both to their staff and customers - no one has any idea what they are ever doing!

Anyone here on vpsBoard a former/current Arvixe customer?

PM me your account email and I'll tell you if you are in a dump from Arvixe.

81k+ records.

Too big for Ye Olde Paste Bin?

HN-Matt said:

Too big for Ye Olde Paste Bin?

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I am not fond of dumping people in public.  The customers did nothing wrong. Shame to victimize them.

Contemplating mailing every customer so they are informed.

Agreed that there is no need to name and shame. I have no interest in the data either, just figured these sorts of dumps usually/eventually end up in public anyway.