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CCTV Script 06/06/13

— This is the script of CNBC's news report for China's CCTV on June 6, Wednesday.

Welcome to the CNBC Business Daily.

Cyber space is like the wild wild west, complete with men in white hats and black hats. The black hats rarely talk, but we did. CNBC's Scott Cohn found a convicted felon who said the heavy-duty crackdown on cybercrime may be going too far and hurting innovation.

[Sound on Tape by Scott Cohn, CNBC: Stephen Watt sure doesn't look like your stereotypical hacker. He's seven feet tall, a fitness buff, and lives in Manhattan's trendy West Village. Things were different growing up in Florida.

Sound on Tape by Stephen Watt, Hacker: Being a little bit anti-social, I sort of found a refuge in computers.

Sound on Tape by Scott Cohn, CNBC: He wrote his first code at the age of six. soon, computers became his main social outlet.

WATT: Interacting with all sorts of different characters around the world really sort of filled a void for me when it came to meeting people with similar interests.

COHN: He became a hacker. and like other hackers, had an online persona.

WATT: I guess you had an identity, a handle ... I'd say that the one most people know me by is the U-T, the Unix Terrorist.

COHN: He insists the nickname was tongue-in-cheek, though it would come back to haunt him later on. In his first television interview, he explains how hackers choose sides - white hats versus black hats:

COHN: The sort of reflexive "white hat" approach to that was well yes, all this information needs to be publicized so people can fix and patch their software //the sort of black hat mentality was like, ok, you can publicize these vulnerabilities, but every time you do make these issues known, there are people out there who are immediately going to start exploiting them.

Where did you fall in on all this?

WATT: It was certainly the side far opposite the white hats.

COHN: He won't say exactly what kind of hacking he did, but ironically that's not what got him in trouble. He had grown tired of hacking...and in 2005 got a job on Wall Street developing software for Morgan Stanley. He still kept up with his computer friends though, and says in 2008, as a favor, he wrote a simple piece of software--known as a "sniffer" program, for his buddy Albert Gonzalez.

WATT: It was not hardwired for any particular target. In fact, it would have worked perfectly well to capture many kinds of different data, from instant messenger traffic, to email, to web traffic, file sharing networks.

COHN: Gonzalez used the program to pull off the largest credit card fraud in history -nicknamed "operation get rich or die tryin'" -which stole tens of millions of credit card numbers from retailers like T-J Maxxx.

Gonzalez pleaded guilty to 19 criminal counts, and is serving a 20 year sentence.

As for Stephen Watt...he pleaded guilty to a single count of conspiracy. A judge called Watt's crime "childish" and "morally irresponsible," sentenced him to two years, and ordered him to pay $171 million --the cost to repair the breach--even though it was Gonzalez, not watt, who made money from the scheme.

If you had known what he was going to do with the code, would you have written it for him?

WATT: You actually might be surprised to know that I haven't thought about that much. It is -- it's a done deal, it's something in the past, I can't go back and change the past so ultimately I don't see much value in going back and hypothesizing about how I might go back in time and change things.

COHN: Prosecutors came down hard on watt, pushing for a stiff sentence. Under federal sentencin guidelines based on the money involved, he could have received life.

WATT: I think that you know the world probably would be a richer place if some of these people were given more lenient sentences or given a chance to find a different course rather than just being pounded into the dust.

I'm Chloe Cho, from CNBC's Asian headquarters. Thanks for watching.