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10 Lessons Learned from Breach Response Experts

SAN FRANCISCO—As hacking collectives target both the public and private sectors with a wide range of motivations, one thing is clear: Destructive attacks where hackers destroy critical business systems, leak confidential data and hold companies for ransom are on the rise. In a presentation here at the RSA Conference, the nation’s largest cybersecurity summit, Charles Carmakal and Robert Wallace, vice president and director, respectively, of cybersecurity firm Mandiant, shared an overview of some of the biggest findings about disruptive attacks from the company’s breach response, threat research and forensic investigations work.

In their Thursday morning session, the duo profiled specific hacking groups and the varied motivations and tactics that characterize their attacks. Putting isolated incidents into this broader context, they said, helps companies not only understand the true nature of the risk hackers can pose even in breaches that do not immediately appear to target private industry.

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One group, for example, has waged “unsophisticated but disruptive and destructive” against a number of mining and casino enterprises in Canada. The hackers broke into enterprise systems, stole several gigabytes of sensitive data and published it online, created scheduled tasks to delete system data, issued ransom requests, and even emailed executives and board members directly to taunt them about the data exposed and increase the pressure to pay. Further increasing that pressure, the group is known to contact journalists in an attempt to publicize the exposed data. Victims have endured outages for days while trying to recover data from backups, and some have paid the ransoms, typically requested in the range of $50,000 to $500,000 in bitcoin.

Mandiant refers to this group as Fake Tesla Team because the hackers have tried to seem a more powerful and compelling threat by claiming they are members of Tesla Team, an already existing group that launches DDoS attacks. As that group is thought to be Serbian, they have little reason to target Canadian entities, and indeed, the bits of Russian used by Fake Tesla Team appears to be simply translated via Google.

In all of the group’s attacks that Mandiant has investigated, the hackers had indeed gained system access and published data, but they exaggerated their skills and some of the details of access. Identifying such a group as your attacker greatly informs the breach response process based on the M.O. and case history, Mandiant said. For example, they know the threat is real, but have seen some companies find success in using partial payments to delay data release, and they have found no evidence that, after getting paid, the collective does anything else with the access they’ve gained.

Beyond considerations of specific hacking groups or their motivations, Carmakal and Wallace shared the top 10 lessons for addressing a breach Mandiant has distilled from countless investigations:

  1. Confirm there is actually a breach: make sure there has been a real intrusion, not just an empty threat from someone hoping to turn fear into a quick payday.
  2. Remember you face a human adversary—the attacker attempting to extort money or make other demands is a real person with emotional responses, which is critical to keep in mind when determining how quickly to respond, what tone to take, and other nuances in communication. Working with law enforcement can help inform these decisions.
  3. Timing is critical: The biggest extortion events occur at night and on weekends, so ensure you have procedures in place to respond quickly and effectively at any time.
  4. Stay focused: In the flurry of questions and decisions to make, focus first and foremost on immediate containment of the attack.
  5. Carefully evaluate whether to engage the attacker.
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  6. Engage experts before a breach, including forensic, legal and public relations resources.
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  7. Consider all options when asked to pay a ransom or extortion demand: Can you contain the problem, and can you do so sooner than the attack can escalate?
  8. Ensure strong segmentation and control over system backups: It is critical, well before a breach, to understand where your backup infrastructure is and how it is segmented from the corporate network. In the team’s breach investigations, they have found very few networks have truly been segmented, meriting serious consideration from any company right away.
  9. After the incident has been handled, immediately focus on broader security improvements to fortify against future attacks from these attackers or others.
  10. They may come back: If you kick them out of your system—or even pay them—they may move on, perhaps take a vacation with that ransom money, but they gained access to your system, so remember they also may come back.

Holding Executives Accountable for Cybersecurity Failures

The average cost of a data breach for companies surveyed has grown to $4 million, a 29% increase since 2013, with the per-record costs continuing to rise, according to the 2016 Ponemon Cost of a Data Breach Study, sponsored by IBM. The average cost hit $158 per record, but they are far more costly in highly regulated industries—in healthcare, for example, businesses are looking at $355 each, a full $100 more than in 2013. These incidents have grown in both volume and sophistication, with 64% more security incidents reported in 2015 than in 2014.

Ponemon wrote:

Leveraging an incident response team was the single biggest factor associated with reducing the cost of a data breach–saving companies nearly $400,000 on average (or $16 per record). In fact, response activities like incident forensics, communications, legal expenditures and regulatory mandates account for 59 percent of the cost of a data breach. Part of these high costs may be linked to the fact that 70 percent of U.S. security executives report they don’t have incident response plans in place.

With so much on the line, more and more companies and consumers continue to search for whom to hold accountable for cybersecurity failures, and the message is becoming clearer: executives need to get serious or watch out.

In a recent report from Bay Dynamics, “How Boards of Directors Really Feel About Cyber Security Reports,” board members expressed a surprising amount of confidence in their abilities to understand and act on cyberrisk threats and indicated there are real risks on the table for IT and security executives. Almost all of those surveyed said that some form of action will be taken should these executives not provide useful and actionable information, with 59% claiming there is a good chance one or more security executives would lose their job over such reporting failures.

More board members (26%) ranked cybersecurity risk as their highest corporate priority than any other risk, including financial, legal, regulatory and competitive risks, and 89% said they are “very involved” in making cybersecurity decisions.

Following the typical presentations from IT and security executives, more than three in five board members are both significantly or very “satisfied” (64%) and “inspired” (65%), but 32% are significantly or very “worried,” and 19% are significantly or very “confused” and “angry.”

According to the report:

Of the information provided to them during these presentations, the majority of board members (97%) say they know exactly what to do or have a good idea of what to do with the information. This statistic, however, does conflict with IT and security executives’ thoughts on the information they present. Based on our December 2015 survey, only 40% of IT and security executives believe the information they provide the board is actionable. There is a clear disconnect here between what the board perceives is actionable information, and what IT and security executives define as data that can be used to make informed decisions.

“IT and security executives are focusing on what they believe are the most impactful issues: a) forward-looking information about known vulnerabilities that could potentially harm the company in the future, b) specifics about data that was lost as a result of known infiltrations and data breaches, and c) the impact of these infiltrations and breaches,” Bay reports. “Interestingly, while information about how much is spent to address cyber risk is reported by IT and security executives in less than one-half of the companies surveyed, this was the most commonly cited information that board members said they needed to make investments for cyber risk planning and expenditures.”

Bay also pointed to a critical challenge in the education gap of many board members and the reliance upon information security executives: a large portion of the education board members have on infosec is from the organization’s IT and security executives, and “when the person education you on cybersecurity is the same individual tasted with measuring and reducing cyberrisk, there’s a fundamental disconnect.” It is extremely difficult for board members to understand what they are missing without education of their own and a third-party audit in place.

As cyberrisk continues to become a top enterprise risk priority, the consequences of failure may impact more of the C-suite than just chief information security officers or top IT executives. In May, following a social engineering fraud case that resulted in a wire transfer of 50 million euros, Austrian aircraft parts manufacturer FACC fired its chief executive of 17 years. Some regulators also want to start holding chief executives accountable in a way that truly speaks to them: their paychecks.

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According to a report from members of parliament on the British Culture, Media and Sport Select Committee, Britain’s status as the leading internet economy in the G20 is under threat from a combination of increasing reliance on digital infrastructure, and inadequate protection of it. To address the issue, they suggest that chief executives who fail to prevent cybersecurity breaches have a portion of their pay docked.

Such was the case with Baroness Harding, the chief executive of TalkTalk, Britain’s fourth-largest broadband provider, which suffered a high-profile cyberattack recently.

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Her performance bonus was slashed by more than a third as a result of the company’s security failings.

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“Companies must have robust strategies and processes in place, backed by adequate resources and clear lines of accountability, to stay one step ahead in a sophisticated and rapidly evolving environment,” said Jesse Norman, chairman of the committee. “Failure to prepare for or learn from cyber-attacks, and failure to inform and protect consumers, must draw sanctions serious enough to act as a real incentive and deterrent.”

How Phishing Emails Can Threaten Your Company

Impostor emails, dubbed “business email compromise” by the FBI, are increasing and targeting companies of every size, in every part of the world. Unfortunately, victims often do not realize they have been had until it’s too late. There are no security tool alarms and there is no ransom note. But because systems appear to be running as normal, everything seems like business as usual. And that is the point, according to Proofpoint’s study, “The Imposter in the Machine.”
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From New Zealand to Belgium, companies from every industry have suffered losses, the study found. Here is a small sampling of recent impostor attacks during the last year:

  • A Hong Kong subsidiary at Ubiquiti Networks Inc. discovered that it had made more than $45 million in payments over an extended period to attackers using impostor emails to pose as a supplier.
  • Crelan, a Belgian bank recently lost more than $70 million due to impostor emails, discovering the fraud only after the company conducted an internal audit.
  • In New Zealand, a higher education provider, TWoA, lost more than $100,000 when their CFO fell victim to an impostor email, believing the payment request came from the organization’s president.
  • Luminant Corp., an electric utility company in Dallas, Texas sent a little over $98,000 in response to an email request that they thought was coming from a company executive. Later it was learned that attackers sent an impostor email from a domain name with just two letters transposed.

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Most often, company executives are targeted, with two common angles. In one case, the always-traveling executive is studied by attackers, who use every resource available to understand the target’s schedule, familiar language, peers and direct reports. Because the executive is frequently on the road, direct reports who routinely process payments can easily be victimized.

Another ploy involves suppliers and how they invoice.

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For example, the supplier’s language, forms and procedures are used to change bank account information for an upcoming payment. If the attackers are successful, a company may find that they have been making payments to them for months without knowing it.

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For more about the risks of phishing, check out “The Devil in the Details” and “6 Tips to Reduce the Risk of Social Engineering Fraud” from Risk Management.

Darkhotel Cyber Attacks Are Targeting Traveling Executives

darkhotel cyber attack

Traveling business executives have been falling prey to cybercriminals acting through hotel Internet networks since at least 2009. In an ongoing, sophisticated “espionage campaign” nicknamed “Darkhotel,” thousands of people traveling through Asia have been targeted and hacked through infected hotel WiFi, cybersecurity company Kapersky Lab reported Monday. About two-thirds of the attacks took place in Japan, while others occurred in Taiwan, China and other Asian countries.

“For the past few years, a strong actor named Darkhotel has performed a number of successful attacks against high-profile individuals, employing methods and techniques that go well beyond typical cybercriminal behavior,” said Kurt Baumgartner, principal security researcher at Kaspersky Lab. “This threat actor has operational competence, mathematical and crypto-analytical offensive capabilities, and other resources that are sufficient to abuse trusted commercial networks and target specific victim categories with strategic precision.”

So strategic, in fact, that the hackers appear to know the names, arrival and departure times, and room numbers of the targets. While maintaining an intrusion on hotel networks, the hackers used this information, waiting until the victim checked in and logged on to the hotel Wi-Fi, then submitting their room number and surname to log in. When the hackers saw the victim on the network, they would trick the executive into downloading and installing a “backdoor” with the Darkhorse spying software disguised as an update for legitimate software like Google Toolbar, Adobe Flash or Windows messenger. Once installed, the backdoor can be used to download other spying tools, such as an advanced keylogger and an information-stealing module.

“These tools collect data about the system and the anti-malware software installed on it, steal all keystrokes, and hunt for cached passwords in Firefox, Chrome and Internet Explorer; login credentials for Gmail Notifier, Twitter, Facebook, Yahoo! and Google; and other private information,” Kapersky explained. “Victims lose sensitive information likely to be the intellectual property of the business entities they represent.”

While the company has identified the means of attack and many of the victims, the hackers carrying them out remain active, the company warned. The attackers did leave a footprint in part of the malicious code—two Korean characters—but, while the cryptographic skills suggest there may be a government entity behind it, some elements of the attacks could be performed by the most basic cybercriminals, and no one has been identified.

Kapersky Lab offered tips to guard against Darkhotel and other cybersecurity threats targeting travelers:

When traveling, any network, even semi-private ones in hotels, should be viewed as potentially dangerous. The Darkhotel case illustrates an evolving attack vector: individuals who possess valuable information can easily fall victim to Darkhotel itself, as it is still active, or to something similar to a Darkhotel attack. To prevent this, Kaspersky Lab has the following tips:

  • Choose a Virtual Private Network (VPN) provider—you will get an encrypted communication channel when accessing public or semi-public Wi-Fi
  • When traveling, always regard software updates as suspicious. Confirm that the proposed update installer is signed by the appropriate vendor
  • Make sure your Internet security solution includes proactive defense against new threats rather than just basic antivirus protection