Will 2021 become the year of heightened cyber security? What will it take for the U.S. Government get their act together? Here we are reported yet another cyber attack that gained entry through a supply chain. 2021 Year of Cyber Security!
As a Cyber Security company, Enigma Forensics is always interested in the 4W’s and 1H of a Cyber Attack. We would be remiss if we didn’t write a post about the most recent SolarWinds Hack allegedly by the Russians. Did the Russians time this cyber attack at precisely the moment in time when the United States is preoccupied? Amidst the Coronavirus shutdowns, the election results, the holidays, and the COVID-19 relief plan, it’s almost as if this particular Russian Hack completely flew under the radar.
The attackers gained entry by using a software update sent out by Texas-based software company SolarWinds, which counts multiple U.S. government agencies as customers. In early December 2020, the news media reported at least 200 organizations, including U.S. government agencies and other companies around the world, have been hacked as part of this suspected Russian cyber attack.
The New York Times reported on December 13, 2020, “The Trump administration acknowledged on Sunday that hackers acting on behalf of a foreign government almost certainly a Russian intelligence agency, according to federal and private experts — broke into a range of key government networks, including in the Treasury and Commerce Departments, and had free access to their email systems.” We can’t find any reporting on what information was stolen.
Who raised the alarm?
It looks like FireEye, a computer security firm first raised the alarm about the Russian cyber attack after its own systems were compromised back in early Spring of 2020. What perfect timing to stage an attack considering the whole country is preoccupied with the rise of the pandemic! FireEye discovered a supply chain attack that was accessed through SolarWinds Orion business software updates in order to distribute malware that they called “SUNBURST.” Experts agree this is the work of highly-skilled actors and was performed with significant operational security. But, the real issue is why didn’t the government cyber protection agencies that are sworn to protect recognize the breach? It took an outside company to inform them of the cyber attack.
Where was the Cyber Attack aimed?
In this case, the U.S. government agencies seemed to be the target. As noted before, the hack was done through what is called a “supply chain attack,” in which malicious code is hidden in legitimate software updates and meant to target third parties. Could it have been the Chinese masquerading as the Russians? President Trump laid claim that there was potential it could have been the Chinese and not the Russians.
When was the Attack Noticed?
As reported by the New York Times, in a statement after a briefing for committee staff members, Senator Ron Wyden of Oregon, who has often been among the sharpest critics of the National Security Agency and other intelligence agencies, said that the Treasury Department had acknowledged that “the agency suffered a serious breach, beginning in July, the full depth of which isn’t known.” But no one will say just how serious the breach was!
Today, as reported in the Hill, the headline reads, “Intel vice chair says government agency cyber attack ‘may have started earlier’.” Sen. Mark Warner (D-Va.), the vice-chairman of the Senate Intelligence Committee, said on Wednesday, December 30, 2020, that the cyberattacks on U.S. government agencies reported at the beginning of the month may have begun earlier than previously believed.
How did the Hackers Hack?
The hackers used malicious code inserted into legitimate software updates for the SolarWinds Orion software. This allowed the hacker to remotely access the victim’s electronic environment. In order to avoid detection, they used a very small footprint and went to significant lengths to lay low and blend in. Very stealth-like in nature! The malware attacked slowly and moved with precision, covering its tracks and using tools that were hard to detect. Does this sound familiar?
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Your email has been frozen and your company website is down. Your IT department has confirmed a data breach. What do you do next? Incident Expert Lee Neubecker and legal expert Kari Rollins offer easy instructions about your next important steps.
It’s a fact! Your IT team confirmed a Data Breach or incident has occurred. What do you do after the fact? Forensic Expert Lee Neubecker and Legal Expert Kari Rollins say don’t panic! First, convene with your incident response team, start to investigate under privilege, and contact a 3rd Party forensic expert to help preserve vital information. Watch the rest of this video for further recommendations about data breach response after the fact!
View Part 3 of our 3-Part Series on Data Breach
The Video Transcripts of Part 3 of our 3-Part Series on Data Breach follows
Lee Neubecker: Hi I’m back again with Kari Rollins, and she’s here talking with me today about data breach incident response. The Sedona Conference recommends, how an organization should respond to such incidents. And we’re talking in this third part segment about what to do after an incident has been reported. So Kari, please tell me what the initial issues are that come to mind when you get that phone call from a client that says something happened.
Kari Rollins: Sure, so usually, as we were talking about in a prior segment, you may not know whether you’ve had a breach as defined by law. You are just told by your information’s security team, or an employee or a manager that you’ve had, there’s been an attack. Or there’s been, “I can’t get access to my email,” Or, “My account’s frozen.” So you immediately start to investigate. You want your.. according to your incident response plan which we’ll hopefully have in place, you’ll convene your incident response team; you’ll start to investigate under privilege. You’ll call if you need your outside forensic investigator to help you access it. Help you access what’s happened, right? That the facts in an incident are really, really important because they drive the legal conclusions. Have you had a breach, or have you had an incident that has resulted in the acquisition with just the access to personally protected information? Or are you.. did you have an incident where maybe the systems that house the personal information were accessed, but there’s no evidence that the malware ever made it into the room where the family jewels are hidden and they were taken out. And that’s an important part of understanding whether you actually have a legal obligation to notify regulatory authorities or consumers. So the first step is always convening the team, putting it under privilege, calling your experts, and starting to investigate the important facts. Was this an outside threat, was it an insider threat? I know you’ve had experience a lot with investigating internal threats, which are on the rise these days as I would expect.
LN: And a lot of these incidents, it may be reported as a data breach, and the question is well, how did it happen? And sometimes, it’s not too uncommon that IT staff don’t receive the resources they request, and that data incidents happen as a result of being under-resourced. And in circumstances like that, there’s still a lot of pressure on the people managing IT, to not only run the organization ongoing but to deal with this whole new layer of troubles. So having that team in place beforehand where those relationships are there really helps.
LN: And the other thing too is, you know, if there is a failure internally, it’s more difficult and less likely that you’re going to get the facts quickly if you’re using the team responsible in some way for the breach to report on what happened. I always recommend that after that initial meeting that preservation of key data occurs, and is offloaded outside the organization. You know, log files, certain key computers, email systems to the extent that they were modified so that there’s the ability to do that analysis. Because when an organization has an incident, it’s quite possible that all the data disappears, and the effort to cover the tracks.
KR: Or it’s not even, it may not be as nefarious as that. It could be that the teams are working so quickly a lot of the remediation plans are to thwart the malware and to remove it. But, in a lot of instances, you need to safely remove it and keep a copy of it, because you need to reverse engineer it. And understand how it got there, understand other signatures it might have; so being thoughtful, and we talk about this being thoughtful about evidence preservation is really critical, especially if you get to the point at which you do have a breach that requires notification. And litigation regulatory inquiry ensues, you will have been expected to preserve that evidence and show the chain of custody. Otherwise, you could have allegations of spoliation leveled against your company.
LN: And I’ve seen circumstances too where a legitimate data incident happens and we’re able to get it quickly and identify the impacted individuals. And sometimes it’s just been a few people; in a circumstance like that, it’s much easier to reach out to those individuals, make things right, and resolve the issue. And be able to report to them what happened. It’s much better than having to publish on your website and report to the attorney general that you had some massive data breach. So, not all data incidences are massive data breaches.
KR: That’s true, some of ’em impact you know, one or two individuals, and you may still have an obligation to notify them under the relevant law. But they don’t have to be the big massive breaches. And again, I think the great thing about the Sedona Conference Guide is that it’s, you know, it helps companies navigate small to big breaches. You know, it’s not intended to be the ultimate authority on the law in this area, because the law is ever-changing. But what it does is it helps companies issue spot from a practical perspective so that they know what laws they need to consult, and why and what issues they need to address, like for example, notifying your insurance carrier. One of the big questions we always get is, Well, we’re the victims, here; the company X is a victim of this cyber attack. Who’s going to pay for it?
KR: And so, insurance coverage for cyber incidents has is a really hot button issue these days. And so it’s important for companies to know in advance what their policies say, what the notification requirements are. Even if they just have a sniff of an incident – maybe it’s not a breach. So that the third party and first-party costs are covered, and that you’re working with your insurance carrier, and you’re working with your insurance council to ensure that coverage. And to make sure that you’re getting the right information to your insurance carrier about your forensic teams. Are they approved? What rate are they going to be reimbursed? What type of reporting do you have to do from a cost an expense perspective to your insurance carrier? So.
LN: And, it true that if companies use their own internal IT resources to do the investigation, that the insurance carriers usually won’t pay out their own internal resources?
KR: It really depends. It depends on the policy.
KR: It really depends on the policy. There are, in some instances, some policies would cover the first party staffing costs, so for example, if you had to pay staff overtime to work 24 hours a day to try and investigate, you may be able to claim that. But it really depends on your policy. There’s certain.. there’s certainly reimbursement line items for business disruption and business interruption. Or, you know the loss of business, loss profits line items, as a result of ransomware tax. But again, knowing your policy is a critical step in preparing.
LN: Where do you see the benefits of using an outside forensic investigator as opposed to internal IT to investigate when an incident happens?
KR: You know I think it’s two-fold, one, a lot of internal IT teams are taxed as it is with their day to day obligations. And if an incident is one that is medium-high critical, you want to be able to dedicate the resources to the incident to investigate swiftly, and to ensure that there’s no delay. And so pulling in a third-party forensic expert alleviates some of that burden and stress on the IT teams. And then separately and secondly, it also creates a level of objectivity that is.. that benefits the company in the event. Or in the unfortunate event, someone in the IT group may have made a mistake that caused the vulnerability. There’s less likely that that mistake would be covered up. Or there’s going to be more candor from the third party expert, the to management team say like, “Hey, this issue should have been addressed”. And it wasn’t, and now you know what thwarts may be in the event. You have some litigation down the road and you need to defend. But so I would say really sort of time and devotion of resources where needed, and objectivity.
LN: Great, well thanks a bunch for being on this show; this was great.
KR: Absolutely, thank you.
Part 1 of our 3-Part Series on Data Breach
Part 2 0f our 3-Part Series on Data Breach
To Learn More About Sheppard Mullin / Kari Rollins
Chicago Tribune reported, “US says Chinese military behind Equifax breach that stole Americans’ personal data” Data Breach Response Experts Lee Neubecker and Kari Rollins say “Data Breach is inevitable!” They give us advice on how to prepare.
Sedona Conference Incident Response Guide
It is not a question of if you will fall victim to a Data Breach incident, it is when. Organizations large and small need to be ready for when cybercrime strikes. Data Breach Response Experts Lee Neubecker and Kari Rollins know how to prepare for a data breach without breaking the bank. Kari is a partner in the Intellectual Property Practice Group for Sheppard Mullin in New York, and also a member of the Sedona Conference, Working 11 group. Kari describes the Sedona Working 11 as a group of Cyber Breach Experts who design tools and how-to resources that are available to the general public through the Sedona Conference website. The Sedona Conference is a nonprofit research and educational institute that brings together jurists, lawyers, experts, and academics. Kari and Lee share their combined knowledge and talk about the options available to small to midsize companies that may not have the resources in-house necessary to respond to a data breach incident.
Watch Part 1 of our 3 Part Series on Data Breach Readiness follow:
The Video Transcript of Data Breach Response Experts Kari Rollins and Lee Neubecker Follows
Lee Neubecker (LN): Hi, I’m here today with Kari Rollins. She’s the co-managing partner of the New York office of Sheppard Mullins. Thanks for being on the show.
Kari Rollins (KR): Thank you for having me.
LN: And I had Kari, she’s a specialist in the whole area of privacy related litigation involving data breaches and personal information and what not. She’s also a member of the Sedona Conference. Could you tell everyone a little bit about what the Sedona Conference does?
KR: Sure, so the Working Group 11 is the Working Group that is dedicated to helping companies and other practitioners understand some of the hot topics and legal issues in data privacy and cybersecurity today that are rapidly evolving as the laws in that area change. And the Sedona Conference itself is dedicated to pulling together practitioners from private sector, public sector, judges, regulatory authorities who all come to talk about their experiences in these different specialized areas so that it you know, you have a knowledge base with a wide variety of perspectives.
LN: Great and so I asked you to come on to talk a little bit about the data breach incident response guide that the conference came up with. Can you tell us what this is about?
KR: Sure, so as a member of the Working Group 11, several of us at the request of Sedona Conference came together to put together what our views were on how to handle a data breach, or an incident response from the very beginning of the breach life cycle, i.e. planning for and anticipating a breach, through the breach investigation itself and even thinking about issues that may be implicated in a post-breach regulatory inquiry and how companies can best defend themselves and prepare for what is now today, the inevitable, a data incident.
LN: So this is a free resource available to anyone?
KR: It is a resource available to anyone. It’s really a practitioner’s guide. We think this is probably best used by small to midsize companies who may not have the resources or staff in-house, legal staff in-house dedicated to responding to incidents. And it’s, though it can be used by any practitioner, any counsel, any type of company, we do expect that this is probably something that would be useful to small to midsize companies as really a guideline and material to help them issue spot and understand what are the issues in incident response? What should I be concerned about? What are the pitfalls? What am I going to need to be on the lookout for?
LN: Great, and if people want more information about this or want to download the guide, where can they obtain it from?
LN: Great, so in our next segment, we’re going to be talking a little bit about what should be done before a data breach happens.
LN: And then in our third segment, we’ll talk a little bit about okay, the data breach happened or an incident happened, what do you need to do to respond? So watch those segments and tune in again. Thanks Kari for being on.
KR: Thank you.
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