Do data breaches have consequences? Law firm closes due to irreparable damages to its reputation

The once prestigious 40-year law firm Mossack Fonseca, infamously known for its data breach that revealed the Panama Papers, is closing at the end of the month. The reason, in its words:

“The reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities have caused irreparable damage, whose obligatory consequence is the total cessation of operations to the public.”

What led to all of that? Its data breach, of course.

Full article: Mossack Fonseca to close doors at end of month

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Down the Security Rabbithole Podcast #DtSR with Los and Tuma talking all things #cybersecurity

DtSR ImageThis week’s #DtSR Podcast featured Raf Los and guest Shawn Tuma talking about all things cybersecurity. Check out more of what was covered and listen to the podcast here!

Check out some of the past episodes with Tuma as a guest.

 

Share on social media and join in the discussion!

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Security Weekly guest Shawn Tuma discusses “what is reasonable cybersecurity?”

Share on social media and join in the discussion!

LinkedIn Post

 

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Marine corp data breach lesson: human error is often the cause and is preventable

There has been a data breach emanating from the U.S. Marine Corps Forces Reserve that impacted 21,426 individuals. The breach exposed their sensitive personal information such as truncated social security numbers, bank electronic funds transfer and bank routing numbers, truncated credit card information, mailing address, residential address and emergency contact information.

Calm down and press the pause button on the hysteria hype machine — it was not the Russians behind it! It was something far more treacherous when it comes to the real world of data breaches: it was human error.

In this case, it happened when an individual sent an email to the wrong email distribution list and the email was unencrypted and included an attachment that contained the personal information described above. You can read more about the breach here: Major data breach at Marine Forces Reserve impacts thousands

THE TAKEAWAY:  The important lesson to take away is that scenarios such as this are far more common than all of the super-sophisticated “hacking” type over-politicised stuff that we usually hear about through the media. This is the real world of data breach that most companies face far more often than they face state-sponsored espionage. In fact, research into actual data breaches reveals that 90% of all claims made on cyber insurance stemmed from some type of human error and, as reported by the highly reputable Online Trust Alliance, “in 2017, 93 percent of all breaches could have been avoided had simple steps been taken such as regularly updating software, blocking fake email messages using email authentication and training people to recognize phishing attacks.” The good news is this type of problem is preventable with some effort.

Below is a checklist of good cyber hygiene that, in reality, all companies should be doing these days. How do you make sure you’re doing it? You develop and implement a cyber risk management program that is tailor-made for your company and is continuously maturing to address the risks your company face — such as my CyberGard™ program.

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

former employee = current data thief

Fifth Circuit Upholds CFAA Conviction for Former Employee’s Misuse Causing Damage Based on Circumstantial Evidence

In United States v. Anastasio N. Laoutaris, 2018 WL 614943 (5th Cir. Jan. 29, 2018), the United States Fifth Circuit Court of Appeals affirmed a jury verdict finding Laoutaris guilty of two counts of computer intrusion causing damage, in violation of 18 U.S.C. § 1030(a)(5)(A) and (c)(4)(B)(i) of the Computer Fraud and Abuse Act.

Laoutaris had been an IT engineer for Locke Lord LLP; following the termination of his employment, he accessed to the firm’s computer network and issued instructions and commands that caused significant damage to the network, including deleting or disabling hundreds of user accounts, desktop and laptop accounts, and user e-mail accounts. This post-termination access was without authorization. He was ordered to pay restitution in the amount of $1,697,800 and sentenced to 115 months’ imprisonment.

On appeal, Laoutaris argued that “the evidence at trial was insufficient to support the jury’s verdict for both counts of conviction because there was no proof he was the person who accessed Locke’s network and caused the damage that occurred on the relevant dates.” Further, Laoutaris had an expert testify that the attacks came from China.

The Fifth Circuit disagreed and found “[t]he evidence at trial shows a rational jury could have found each essential element for the § 1030(a)(5)(A) offenses charged against Laoutaris, who elected to testify. Contrary to his assertions, there was ample circumstantial evidence identifying him as the perpetrator of these offenses.”

The government’s brief indicates that the following evidence was admitted on this issue, beginning at page 6:

At trial, the government presented a substantial volume of circumstantial evidence identifying Laoutaris as the intruder. Logs created by the servers on the Locke Lord network showed that the intruder on December 1 and December 5 connected to the network using LogMeIn, which was installed on the HOBK01 backup server in Houston, and accessed the network using the credentials of a Windows “master services account” called svc_gn and its associated password. (ROA.1463-1515, 2835-47.) The IP address of the intruder on December 1 and December 5 was 75.125.127.4. (ROA.2768, 2835.)
That IP address was assigned to The Planet. (ROA.1077-79.) Laoutaris was an employee of The Planet at the time. (ROA.1068-70; see also ROA.2635-83.) Kelly Hurst, Laoutaris’s supervisor at The Planet, testified that the IP address was The Planet’s public wireless network at the Houston corporate office, which employees would be able to use while working out of The Planet’s corporate office. (ROA.1077-78.)
*7 Laoutaris was also associated with the LogMeIn software running on the Houston backup server. The software program was installed by a person who identified his email address as “c_hockland@hotmail.com.” (ROA.1304-07, 2848.) Records from Microsoft established that the account was created by “A.N. Laoutaris.” (ROA.2587.) Further, several Locke Lord employees testified that “c_hockland@hotmail.com” was an email address they knew to be associated with Laoutaris. (ROA.1306.) Additionally, Laoutaris’s personnel file included his resume, where he used the email address, and an email he sent on his last day providing c_hockland@hotmail.com as his forwarding email address. (ROA.2550.) Even after he quit, Laoutaris used that email address to send a message to a former colleague at Locke Lord making disparaging comments about the firm and his former supervisor. (ROA.2559-60.) Laoutaris continued using the email address as recently as July 2014, after he was indicted. (ROA.2681.)
The government also presented evidence establishing that Laoutaris had the password for the “svc_gn” account. The “svc_gn” account was the “master of all masters” account that had “no limits” on what it could do within the Locke Lord network. (ROA.1147.) IT engineers at Locke Lord explained that all of the engineers would from time to time use the “svc_gn” account when performing various tasks on the network and that all the *8 engineers had the password. (ROA.1147.) The jury heard evidence that Laoutaris asked for, and received, the password for the “svc_gn” account shortly before quitting the law firm. On August 10, 2011, a few days before Laoutaris quit, he requested the password from Michael Ger and Stan Guzic, two of the other IT engineers at Locke Lord. (ROA.2556-57.) Guzic testified that Laoutaris “constantly asked us for the password” and thus “to help him remember it, we used his name within the password itself” – specifically, “4nick8.” (ROA.1151.)
Not only was Laoutaris specifically tied to the December 1 and December 5 attacks, the government presented evidence tying him to at least 12 unauthorized intrusions into the Locke Lord network through LogMeIn. (ROA.2703-16, 2746, 2756, 2758, 2760, 2762, 2764, 2766, 2768, 2835, 2849.) Each of those intrusions originated from an IP address that was tied back to Laoutaris – either his home or his place of employment. (ROA.2703-16.)
The government’s brief also provides an excellent example of how to calculate a loss in a case such as this, beginning at page 12.

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

What is “reasonable cybersecurity” and how do courts view it? (SecureWorld interviews)

What is “reasonable cybersecurity” and how do courts view “reasonable cybersecurity”?

See KnowB4’s discussion of these interviews

These are two excellent questions that I was asked and I answered, as succinctly as I could, in two short interviews with SecureWorld. Tell me what you think about my answers.

What Is Reasonable Cybersecurity? – SecureWorld article

How Courts & Attorneys View ‘Reasonable Cybersecurity’ in 2018 – SecureWorld article

Here are the videos.

 

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Uber’s CISO Makes Case for Uniform National Data Breach Notification Law

UberUber’s Chief Information Security Officer (CISO), John Flynn, made a case for a uniform national data breach notification law in his testimony to members of Congress (see penultimate paragraph of full written testimony):

I would like to conclude by stating that we strongly support a unified, national approach to data security and breach standards. We are proactively engaged in the many conversations in both the technical and policy communities to help identify what the critical components of federal data breach legislation should be, and are pleased to see this robust conversation taking place with various Members of Congress and your staff. We welcome the opportunity to be at the table to help all stakeholders understand the best practices.

I agree!

NTSC LogoIf you are a CISO of a company and are interested in participating in this discussion, please considering joining the National Technology Security Coalition (NTSC) in this effort to get an appropriate uniform federal data breach notification law passed. (Disclaimer, I am a member of the NTSC’s Policy Counsel and will be assisting in drafting proposed legislation.)

See these related posts:

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Uber CISO’s Testimony Clarifies Payment to Hackers was Not Legitimate Use of Bug Bounty Program

As bits of information about the Uber data breach have trickled out, including the purported payment through a bug bounty program, I have been concerned about the implications on legitimate corporate bug bounty programs. My concerns grew when I read the New York Times article, Inside Uber’s $100,000 Payment to a Hacker, and the Fallout

The February 6, 2018, testimony by John Flynn, Uber’s Chief Information Security Officer, makes me feel better because it finally made clear (to me, anyway) that this was not a legitimate bug bounty program situation (see full written testimony):

As you know, Uber paid the intruders $100,000 through HackerOne and our bug bounty program. Our primary goal in paying the intruders was to protect our consumers’ data. This was not done in a way that is consistent with the way our bounty program normally operates, however. In my view, the key distinction regarding this incident is that the intruders not only found a weakness, they also exploited the vulnerability in a malicious fashion to access and download data.

***

We recognize that the bug bounty program is not an appropriate vehicle for dealing with intruders who seek to extort funds from the company. The approach that these intruders took was separate and distinct from those of the researchers in the security community for whom bug bounty programs are designed. While the use of the bug bounty program assisted in the effort to gain attribution and, ultimately, assurances that our users’ data were secure, at the end of the day, these intruders were fundamentally different from legitimate bug bounty recipients.

When dealing with something like this, in the world of data breach reporting and notification, details, motive, and the order of events matter. It appears that Uber attempted to take an existing incident (that was likely a data breach requiring reporting and notification) and mitigate it by running it through its bug bounty program in an effort to de-breach it, so to speak. While this was a creative approach and one that could raise issues about other mitigation efforts that companies may try for dealing with incidents, such discussions are beyond the scope of this post.

What is important, to me anyway, is that this was not a legitimate use of Uber’s bug bounty program that is now being second-guessed. I think that should help corporate security and legal professionals sleep a little better.

In Flynn’s testimony, he does an excellent job of explaining bug bounty programs and, specifically, Uber’s bug bounty program and the success it has had since implementation. He also explains Uber’s incident response process in this particular situation and offers insight into just how quickly an IR team must act — something everyone should understand. I strongly encourage anyone interested to read his full testimony.

See Uber: ‘No justification’ for covering up data breach

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

House panel to DHS, FBI: help small biz with cybersecurity – start with good cyber hygiene

The following testimony excerpts are very similar to what the #CyberAvengers have been preaching, and for good reason, it is the truth. Checkout the #CyberAvengers Tools for where to begin.

Richard Driggers, DHS deputy assistant secretary for the cybersecurity and communications, said that basic computer hygiene, such as regular software updates, could keep small businesses safer.

“It doesn’t take sophistication to exploit a vulnerability in a small business. And I think all small businesses need to assume that they have some type of vulnerability that exists within their networks or devices that they’re using,” Driggers said. “A lot of small businesses don’t have the resources to really put in place very sophisticated cyber defense mechanisms. But they do have the resources to do the low-cost things … and that should be the focus.”

* * *

“The best thing small businesses can do is elevate the need for cybersecurity within their organizations. Hire capable, competent people to help protect data, create a culture within the organization that promotes security. It’s gotta be something you do every day; it can’t be after the fact,” Marshall said.

Full article: https://fcw.com/articles/2018/02/01/small-biz-cybersecurity-williams.aspx?m=1

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

FMCNA to Pay $3.5 Million for Non-Compliance with HIPAA’s Risk Analysis and Risk Management Rules

Fresenius Medical Care North America (FMCNA) has agreed to pay $3.5 million to the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR), and to adopt a comprehensive corrective action plan, in order to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules. FMCNA is a provider of products and services for people with chronic kidney failure with over 60,000 employees that serves over 170,000 patients. FMCNA’s network is comprised of dialysis facilities, outpatient cardiac and vascular labs, and urgent care centers, as well as hospitalist and post-acute providers.

Read the full article on HHS’ website and pay careful attention to the 6 specific issues the OCR’s investigation identified as a basis for the fine:

  1. Failed to conduct an adequate risk analysis.
  2. Provided unauthorized access for a purpose not permitted by the Privacy Rule.
  3. Failed to implement policies and procedures to address security incidents.
  4. Failed to implement policies and procedures for devices containing ePHI inside and outside of the facility.
  5. Failed to implement policies and procedures to safeguard their facilities and equipment therein from unauthorized access, tampering, and theft.
  6. Failed to encrypt ePHI in appropriate circumstances.

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.