Outsourced security program failure leads to $100K regulatory fine

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Another reminder of the importance of managing third party vendor relationships…

The Commodity Futures Trading Commission fined AMP Global Clearing (an electronic trading firm) $100,000 for a disclosure of 97,000 files containing customer information to an unauthorized third party due to a misconfigured network attached storage device.

AMP had outsourced parts of it information systems security program to a third party provider who had failed to detect the exposed data during three successive vulnerability audits of AMP’s systemes.

Outsourcing can be a really effective tool for augmenting a firm’s infosec program, but business leaders and CSOs need to remember that the ultimate responsibility for protection of corporate and customer data still remains with them.  However, when the firm is a regulated entity, the risks of relying on an outsider to perform critical parts of the infosec program without adequate supervision outweigh the (admittedly attractive) cost savings.

Monitoring third party service provider performance is a hard problem.  Most firms don’t have the resources to perform in person audits and most providers don’t have the ability to allow every customer to audit them.  This is why external independent audits of third party providers’ security practices are so important.  These audits need to be performed against generally accepted security standards with objective audit criteria.  ISO27001 and SSAE18 SOC2 are two examples of such audit types.

Even if a business partner gets a clean bill of health from an independent auditor, their performance must be monitored by the line of business who engaged them as well as by the infosec department.  Recently, I have been seeing more and more inquiries from my firm’s customers coming between their annual due diligence reviews of our services.   Most of these inquiries occur when there is a “celebrity vulnerability” like Spectre/Meltdown – what I am hoping to see in the future are more questions confirming “security 101” procedures and practices.

The advent of security ratings firms like Security Scorecard and Bitsight can also be helpful in this area.  While their security ratings cover specific aspects of a vendor’s security program (practices that can be seen from the Internet), they can provide an ongoing data point to be used to detect potential problems in between those annual security reviews.  I believe that this industry is in its early stages and that the results that they provide must be examined carefully against the specific requirements of your security program.

As companies outsource infrastructure, applications and services to third parties in order to concentrate on their core competencies, the importance of third party vendor management is going to continue to grow.

Outsourced security program failure leads to $100K regulatory fine

Leaky buckets and acquisition best practices

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There are three interesting things for CSOs to think about in this story on a leak of passport and other personal information on tens of thousands of people:

  1. If you are going to use Infrastructure as a Service providers like Amazon, make sure that the people using them take the time to learn about and use the security features.  Amazon provides the means to store data securely and has a wealth of documentation on security best practices.  Having a breach due to an improperly configured S3 bucket is amateur hour, folks.
  2. When acquiring new companies, especially small ones, security due diligence needs to be job one.  Finding out where sensitive information is stored and how it is protected is a must.
  3. Know your third parties (and those of your acquisitions) – FedEx blamed the breach on an un-named third party.  Remember – you can outsource the function, but you cannot outsource responsibility for security.  When doing an acquisition, look at the list of every vendor that the target company pays and figure out which ones might be holding data.

I have been through the acquisition process a few times in the past ten years – identifying show stopper issues during due diligence is important, but it is vital to keep the process going after the deal is done.  The more you dig into the security of the acquired firm, the more “interesting” security issues you will find.

Leaky buckets and acquisition best practices

Malicious data leaks and corporate liability – a tale of two countries

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Databreaches.net had a link to a very interesting article about corporate liability for an employee’s malicious leaking of employee information.  What was most striking to me was the contrast between cases in the UK and the US.

In the UK, a disgruntled employee leaked payroll data for 100,000 employees of a very large supermarket chain to newspapers in order to embarrass the firm after they were disciplined for bad behavior.  The courts found that employees have the right to sue the supermarket chain for damages as they were “vicariously responsible” for the acts of their employee.

In contrast, a similar case in the US against Coca Cola had a very different outcome.  A Coca Cola employee sold laptops which they were tasked with destroying and these laptops contained personal information of employees.  Employees sued, but the courts dismissed all of their claims, saying that Coca Cola could not have known about the rogue employee’s activities.

This case has a few lessons for infosec professionals:

First, if your firm operates in multiple jurisdictions, the laws and norms in these jurisdictions can be very different.  When judging risk and formulating policy, work with your legal departments to make sure you understand these differences.

Second, I feel that this case also shows the differences in attitudes to personal information in the US and the rest of the world.  It seems like the US does not value individual privacy nearly as much as other countries. Again, if you operate in multiple jurisdictions, you need to keep this in mind.

As the stakes get higher for organizations (for example $20M or 4% of global revenues for each breach of the EU GDPR), these are things we need to worry about.  Buy your general counsel a beer and talk it out before you have to deal with a lawsuit.

Malicious data leaks and corporate liability – a tale of two countries

Two factor authentication on web apps should be the default

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tl;dr – If you are using Microsoft Office 365 (or any other hosted email solution) and have not enabled two factor authentication, you are bad and you should feel bad

Microsoft and other cloud vendors really need to make two factor authentication the default for their email and other business critical cloud applications.  You should have to make an active decision to turn off 2FA and be forced to watch a video about companies who were hacked as a result of lack of 2FA in order to make the decision stick.

I spent too much time today dealing with two business partners (one small and the other large) from whom my users received multiple emails containing PDF phishing documents.  These emails were hard for users to recognize as bad –  they came from a real email account of a real person at a real firm that they had done business with.

What had happened is that our partners were using hosted email and had not enabled two factor authentication.  A user at each got phished and the attacker in each case took control of their email to send the evil documents to all of their contacts.

Fortunately for us, our protections worked – user awareness training and multiple layers of web and email filtering alerted us to the problem and none of our users fell into the trap lain by the attacker.

It could have been much worse.  A more sophisticated attacker could have utilized the identities of the email senders in a more sophisticated way, such as to redirect payments on invoices or to get our users to disclose confidential information.  Or who knows what.

That being said, it still is pretty bad – any information we sent to those email accounts in the past is now in the hands of who knows who. We are reviewing the traffic to the hacked accounts to  determine what could have been exposed.  While it seems that these guys were not after intellectual property, we will never know where that information ends up.

The decision on the part of these two partners to not have 2FA has real costs for my firm – users had to be notified, all emails sent to those partners need to be reviewed for sensitive information and an incident report written.

For now, I am pulling all of our email logs to determine which of our vendors are using various hosted email platforms and sending them a note inquiring as to whether they use 2FA.   If not, we are going to have some serious talks with them about their security posture.  We’re also going to start monitoring for partners who move from on-prem to hosted email.

This type of attack is happening way too often and opens up companies who never signed up for these hosted services to risk which just should not be there.

Off to look at emails…

Two factor authentication on web apps should be the default

Insider Threat Resources – 01-Feb-2018

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I have the privilege as serving as a mentor for a course at SUNY-Albany focusing on the problems posed by insider threats.   Since I am SUCH a wonderful mentor, I will be keeping an eye out for interesting resources for the students.  Since these might also be useful to others, I will be a list of them blogging them each week.

Best Practices

Mitigating the Inside Threat: Boeing’s Successful Approach
Security Magazine – Feb 2018
Requires free registration to read (which seems to be busted right now – hope they fix this as it sounds like an interesting piece)

Updating our Knowledge of Insider Threats
Measuring Organizational Confidence in Addressing Insider Threats
Conference Board of Canada – Jan 2018

7 Insider Attacks Behavioral Analytics Detects
CSO Magazine 2018-01-31


Recent Insider Incidents

2017 US State of Cybercrime Highlights on Insider Threats
US Veterans’ Administration


Just Interesting

What the Count of Monte Cristo Teach can teach us about Cybersecurity
IEEE Spectrum – Jan 2018

Insider Threat Resources – 01-Feb-2018

Response to Russian government cyber attacks – a lost opportunity?

Where is James Bond when you need him?

Russia’s apparent interference in the United States’ Presidential election marks an escalation in the targeting of state sponsored cyber attacks.  What the US does in response to this strike against the very basis of our (somewhat) fair and free elections process really matters.

Letting Russia achieve its goals without any response is problematic, as it would encourage them and other state and non state actors to continue to target the US without fear of retribution.  If you believe (as I do) that cyber operations will play a significant role in 21st century conflicts, doing nothing is clearly not an acceptable response. 

So, if the US were to respond, what is a proportionate response?  As imperfect as our electoral system is, interference in Putin’s sham elections in which there is no opposition with a snowball’s chance in hell of winning, is clearly a non starter.  A limited attack on critical infrastructure (shutting down the electric system in Novosibirsk) sounds good at first, but would seem to violate the laws of war about collective punishment and targeting civilians. There is also a risk that mounting such an attack would tip off Ivan to methods and sources, and make it harder to use such weapons in war time.  An attack on a manufacturing control system aimed at shutting down production or damaging machinery might be more appropriate as a demonstration of both capabilities and intent.  

So, if the US were to take out Vodka Distillery No. 6, should we take public credit or would a private note government to government be enough to deter future attacks?  It seems to me that taking public responsibility for such an attack is important if we want to deter Russia and other state and non state actors in the future.  

Of course, all of this seems to be academic as the next administration clearly benefited from this attack and seems to include many with close ties to Russia and Putin.  Even if the Obama administration could plan, mount, and execute a response it is unclear whether the new administration would pursue a policy of continuing response over the next four years. Without threats of future retaliation for new cyber attacks, a response now would be a one time gesture of revenge. 

Getting political here for a minute, it seems to me that a President who does not pursue a program of responding to serious attacks by a nation state on our homeland would be, at the very least, not be doing their job and at worst, acting as an agent of a foreign state. Time will tell what President Trump will do, but you will have to pardon me if my expectations are low.

In the coming days, the Obama administration should make every effort to collate and make public all the evidence of the Russian government’s role in this affair.  Then, it is up to we as a people to demand a proportional response from our elected officials.

Response to Russian government cyber attacks – a lost opportunity?