In an appearance on CNN’s “The Situation Room” on Tuesday, Kim Masters, editor at large for The Hollywood Report, laid out some of the details behind the Sony hacking scandal, which may involve North Korea.

“Sony has to take the threat seriously,” she explained. “They are completely paralyzed. All manner of information has leaked about their employees, about their internal communications, about their relationships with talent, movies that have not been released yet – all of these things have been leaked — and there are still more leaks to come. The studio is in a state of total panic and shutdown. Employee morale is in the basement and relationships in tatters. This is a very serious act of cyber sabotage. I suspect no business in any cyber sabotage. I suspect no business in any part of the industrial world has seen, in this country, has something on this order.”

Masters speculated Sony, along with Seth Rogen and James Franklin, the stars of the movie “The Interview,” which is the movie that has been thought to inspire the hacking, were stepping up security.

“Based on my reporting, I suspect that they actually do know that it’s North Korea,” Masters added. “I think the problem is, if you say that, then you really do have to figure out what you’re going to do about it and this is not only a cyberattack on American soil but now a threatened physical attack. What do you do? So, I think it’s in everybody’s interests for now to say it could be North Korea but we’re not sure.”

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