Cyber Security Weaknesses Would Reduce The Sales Price Of An Acquisition

An Article last week in the Pittsburgh Post-Gazette written by the law firm of Meyer, Unkovic & Scott LLP, stated what I would think is obvious, but apparently not.

78 percent of global dealmakers report that cybersecurity isn’t a part of the due diligence process before mergers and acquisitions.

And why, you ask, is that so?  The answer also seems obvious to me —

90 percent of survey respondents reported that information about past breaches or cybersecurity weaknesses would reduce the sales price of an acquisition.

Alternatively, and even worse from the broker’s or seller’s standpoint, some buyers might walk away from the deal, and that would be the last thing that the seller or broker want.  Since the broker is not legally required to suggest to the buyer that performing a cyber due diligence assessment and if one is performed, it might either reduce the sales price or blow up the sale, the broker is not going to suggest it.  Ultimately, the buyer is left holding the bag.

From the buyer’s standpoint, requiring a cyber security due diligence audit is a smart negotiating move.  If there are any serious issues then the seller should be required to fix them before the close or the buyer should walk away from the deal.  If the buyer is comfortable that whatever cyber security issues are present are not fatal, then the buyer can and should negotiate a lower price.

Assuming the buyer is using a broker or lawyer – and the buyer should be – It seems to me that it borders on negligence for the buyer’s agent not to strongly recommend that a cyber due diligence be performed prior to closing.

Mitch Tanenbaum

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What Your Office Might Look Like If You Are Hacked

According to multiple news reports (like BBC, Forbes, and  Computerworld), Sony has been hacked again.  This time they were hacked by the GOP (no, not that GOP, the Guardians of Peace).

So, here is what Sony’s office looked like yesterday – and your’s might if you get hacked.

Employees came into the office yesterday, turned on their computers and were greeted by this:

sony

 

Sony (technically Sony Pictures Entertainment) told the media they were investigating an IT matter when this was leaked to the media – not a great job of rumor control.  Later that was updated to “Sony Pictures Entertainment experienced a system disruption, which are working diligently to resolve.”

The company’s internet connections were taken offline as a precaution.

Employees in New York, Los Angeles and the Culver City Studios were told not to access the internet or corporate email, to disable any wireless connections and voice mail (which goes to email) is intermittent.  Employees were told they could still use the phones.  Later, employees were sent home.

That was yesterday.  Today, day two, there is no update.  I suspect but have no inside information, that they really are not sure how deep the hackers are in the company or what information they exfiltrated.  Rumors include that the hackers had inside help.

The GOP is threatening to release internal “Secret and Top Secret” documents if their demands are not met.  The GOP also said that “this is just the beginning”.

Sony Pictures is a multi billion dollar company so I doubt it is going out of business any time soon (at least as a result of this – their financials have not looked too good in the last 8 quarters).  None the less, this is a serious disruption with no end in sight.

The political embarrassment of the hack will last a long time, especially after the multiple hacks they endured last year.

But here is the question.  Let’s assume this happened to your company.  How would your company handle it – from communications to operations to customers to vendors.  Are you prepared for something like this?  

Mitcfh

 

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DarkHotel Malware

Wired reported on an interesting (yes, I know I am strange, to think that malware attacks are interesting, but they are!) malware attack.

The malware, known as DarkHotel, pops up a message alerting the user to a software update as soon as they connect to the hotel’s WiFi.

Of course, the update is not a legitimate update, but rather a piece of malware that the attackers are getting you to install for them.  Thank you for helping out.

Reports by Kaspersky Labs, the Russian anti virus vendor say that they have seen the attacks at five star hotels and they seem to be targeted at business travelers and sometimes specific travelers.

Kaspersky said that the attackers have been active for at least seven years.

According to Wired, the attackers use zero day exploits and a kernel mode keystroke logger  – not simple to do.  In addition, the code is signed.  It appears that the attackers reverse engineered the certificates of several certificate authorities.  The combination of all of this tends to indicate that these attacks are either state sponsored or state sanctioned.

According to Kaspersky, the attackers show up at the hotel a couple of days before the target arrives, loads the malware on the hotel servers (after hacking them) and then removes the malware from the hotel servers when the target leaves.

Kaspersky counter attacked a few (26) of the attackers servers in October gaining access to the logs of the attackers, at which point the attackers did an emergency shut down of close to 200 of their command and control servers.

For more details, read the Wired article linked above.

More importantly, this attack vector could be recreated pretty simply in a less sophisticated implementation.

I recommend that you should never load a patch or update while connected to a public WiFi network – especially if it is a place you frequent or that people would know, in advance, that you are going to be there on a particular day or time.

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Another Nation State Sponsored Trojan?

ars technica reported yesterday on a very sophisticated trojan that has been around, they say, since 2008, went dark in 2011 and came back in 2013.

The trojan is comprised of 5 stages, all but the first of which is encrypted and is serially decrypted to avoid detection.

The interesting part about it is that it apparently is a framework with plugins to attack everything from your keyboard to your mouse to a radio base station.  The link above has more details and a graphic showing the architecture of this thing.  It seems to be very sophisticated.

Supposedly, there have only been around 100 known infections – but do we really know? – mostly inside ISPs.  Symantec suggests that this was done not to spy on the ISP, but rather on their customers.

Now that the cat is out of the bag, I am sure we will hear more in the coming days.  This could be another Stuxnet.

Mitch

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Why You Should Use Your Debit Card As A Credit Card

Many of us try hard not to use our credit cards.  As a result, we tend to use our debit cards frequently.

Many debit cards carry either a Visa or Mastercard logo, which allows you to use the card as either a debit card or a credit card.  No matter which option you choose, the money is withdrawn from your bank account immediately, so from a financial standpoint, it really does not matter which option you choose.

Merchants such as Walmart, often try very hard to get you to choose the debit option.  The reason for this is that the merchant pays a smaller fee to their bank or payment processor for each transaction if you choose the debit option over the credit option.  For large transactions, this difference can be significant to the store, because if you choose the credit option, the store pays a percentage of the transaction amount.  If you chose debit, the store pays a flat fee, no matter the size of the transaction.

HOWEVER, from your perspective as a consumer, if the store that you shop at and use your card as a debit card is hacked – and that seems to be all too common these days – the bad guys can duplicate your debit card and with your pin, can empty your bank account.

Most banks allow you to limit the amount of withdrawals that are permitted on a daily basis to reduce your exposure.  Many banks also will send you a text message, in real time, every time your debit card is used – including atm withdrawals – so you will know instantly if your card is being used.   If you get a text message and you didn’t use your card, call your bank immediately to shut down the card.

So, even though some stores cajole you to use your card as a debit card, I recommend that, for your own financial safety, you shouldn’t do it.

There was an item on the news tonight here in Denver that some RTD (the local transit agency) ticket kiosks were compromised with skimming devices and some users had ATM withdrawals made from their bank accounts afterwards.  Had they used the card as a credit card, the skimmer operator would not have had their ATM PIN and would not have been able to withdraw cash from their bank account.

Mitch Tanenbaum

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Malware specifically targets password managers

Boy, just when you thought you were doing it right!

Ars Technica, Dark Reading, Security Week and others are reporting a new variant of the Citadel malware that has been around for several years.

According to the articles, the new variant monitors processes and when it sees Keepass, Password Safe or neXus start up, it fires up a keystroke logger to grab the master password for the file.  At that point, the fact that file is encrypted is of little value since the malware has the key to the lock.

Apparently, according to IBM researchers who found this, this variant was created by just modifying the config file of the malware.  This means that if you change the name of the process, all that would need to be done to catch that would be to edit the config file and if they wanted to do the same thing with a different password manager, again, all they would need to do is edit the config file, so the fact that you are using a different password manager only protects you today, not tomorrow.

They said they did not know if this was a mass change or a targeted attack, but if it was targeted, I suspect it won’t be for long.

I *think* that if your password manager supports two factor authentication, then that might protect you against this attack.  It depends whether the second factor is static or dynamic.

This is why the security business is a cat and mouse game.  You make a change, the bad guys make a change.  You make a change to your change.  You get the idea.  If you were hoping that you could do something once and be done, I am sorry, but that is not gonna happen.

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Privacy, Security and Cyber Risk Mitigation in the Digital Age

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