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Source: Bloomberg

Posted on June 30, 2011

The U.S. Department of Homeland Security ran a test this year to see how hard it was for hackers to corrupt workers and gain access to computer systems. Not very, it turned out.

Staff secretly dropped computer discs and USB thumb drives in the parking lots of government buildings and private contractors. Of those who picked them up, 60 percent plugged the devices into office computers, curious to see what they contained. If the drive or CD case had an official logo, 90 percent were installed.

"There's no device known to mankind that will prevent people from being idiots," said Mark Rasch, director of network security and privacy consulting for Falls Church, Virginia-based Computer Sciences Corp. (CSC)

The test showed something computer security experts have long known: Humans are the weak link in the fight to secure networks against sophisticated hackers. The intruders' ability to exploit people's vulnerabilities has tilted the odds in their favor and led to a spurt in cyber crimes.

In real-life intrusions, executives of EMC Corp.'s RSA Security, Intel Corp. (INTC) and Google Inc. were targeted with e-mails with traps set in the links. And employees unknowingly post vital information on Facebook or Twitter.

It's part of a $1 trillion problem, based on the estimated cost of all forms of online theft, according to McAfee Inc., the Santa Clara, California-based computer security company.

Rule No. 1

Hundreds of incidents likely go unreported, said Rasch, who previously headed the Justice Department's computer crime unit. Corporate firewalls costing millions to erect often succeed in blocking viruses and other forms of malware that infect computers and steal data such as credit card information and passwords. Human error can quickly negate those defenses.

"Rule No. 1 is, don't open suspicious links," Rasch said. "Rule No. 2 is, see Rule No. 1. Rule No. 3 is, see Rules 1 and 2."

A full report on the Homeland Security study will be published this year, Sean McGurk, director of the department's National Cybersecurity and Communications Integration Center, said at a June 16 conference in Washington.

Tactics such as spear-phishing -- sending a limited number of rigged e-mails to a select group of recipients -- rely on human weaknesses like trust, laziness or even hubris. That's what happened in March, when attackers used a clever ruse to exploit their discovery that RSA -- the company that provides network-access tokens using random secondary passwords -- was in a hiring campaign.

Organized Attack

Two small groups of employees received e-mails with attached Excel spreadsheets titled "2011 Recruitment Plan," the company said in April. The e-mails were caught by the junk- mail screen. Even so, one employee went into the folder, retrieved the file and opened it.

The spreadsheet contained an embedded Adobe Systems Inc. (ADBE) Flash file that exploited a bug, then unknown to San Jose, California-based Adobe, that allowed hackers to commandeer the employee's PC. RSA said information related to its two-factor SecurID authentication process was taken.

Banks may be forced to pay $50 million to $100 million to distribute new RSA SecurID devices, according to Avivah Litan, a Gartner Inc. research analyst.

"The team that hacked us is very organized and had a lot of practice," Uri Rivner, head of new technologies at RSA Security, said at a June 17 conference in Spain. "I can compare them to the Navy Seals Team Six, which hit Osama Bin Laden."

The Federal Bureau of Investigation began warning in early 2009 about a rise in spear-phishing attacks. To succeed, they require the target to open a link presumably sent by someone they know or trust.

Whale Phishing

Total phishing attacks increased by 6.7 percent from June 2010 to May 2011, according to Symantec Corp. (SYMC)'s State of Spam & Phishing monthly report. The number of non-English phishing sites increased 18 percent month over month.

Spear-phishing is evolving into what Rasch calls whale phishing: Targeting senior-level executives whose computers may have access to far more sensitive information than rank-and-file workers.

Technology executives are attractive targets because their positions give them access to a trove of information, and they tend to believe they're better protected from computer hackers than their employees, Rasch said.

Hackers research decision makers by browsing social networks, reading up on news about the company, and creating e- mails and links that appear to be genuine and come from people that the targets know.

'Flipping Burgers'

"Phishing is on a different trajectory than it's been in the past," said Malcolm Harkins, Intel's chief information- security officer.

Intel was targeted a few years ago, when Chief Executive Officer Paul S. Otellini opened a hacker's e-mail that looked like it came from a federal circuit court in relation to legal proceedings.

Hackers have many motives, including making mischief, selling information for profit or stealing trade or military secrets. While many of the attacks seem sophisticated, the majority require little programming knowledge because people in the companies do the work for them, Rasch says.

"It beats flipping burgers for a lot of these guys," he said.

Their forays can be aided by workers who place their trust in digital communications despite warnings they should be more cautious.

Faux Vixen

In early 2010, security specialist Thomas Ryan created a fictional online-security analyst using pictures taken from a pornography-related website. Through e-mail and other online correspondence, he said he gained access to e-mail addresses and bank accounts, learned the location of secret military units based on soldiers' Facebook photos, and connections between people and organizations.

The fictional woman received private documents to review, speaking requests and job offers from Google Inc. (GOOG) and defense contractor Lockheed Martin Corp. (LMT), Ryan said.

Assets are also put at risk by people who use easy-to-crack passwords, and repeat them among Facebook, e-mail and bank accounts.

When Daniel Amitay checked to see which passwords people were using in his iPhone app, Big Brother Camera Security, he found that many weren't secure. Out of 204,508 recorded passwords, the most common was "1234," followed by "0000" and "2580," the middle line of the numeric keypad.

CEO Resigns

"By knowing a bit of psychology, people can avoid security," Amitay said. "People choose things from memory, and they are making the job easier for someone who wants to steal their pass code."

In a February attack on Sacramento, California-based security firm HBGary and its sister, HBGary Federal, the hacker group Anonymous said it cracked the passwords of CEO Aaron Barr and Chief Operating Officer Ted Vera, and discovered they used the same passwords in e-mail accounts, LinkedIn, Twitter and elsewhere. Anonymous said it deleted "gigabytes of backups and research data" from company servers.

The group didn't stop there. Using the compromised personal e-mail account of HBGary owner Greg Hoglund, they asked for and were given the user name and password of a second HBGary Federal site, which had to be taken offline.

The HBGary attack tied back in an unusual way to January 2010 security breaches at Google, Adobe Systems Inc., Juniper Networks Inc. (JNPR) and defense contractor Northrop Grumman Corp. (NOC)

Tracking Executives

Anonymous released HBGary's e-mails, which show that DuPont, Walt Disney Co. (DIS), Sony Corp. (6758) and Johnson & Johnson (JNJ)were also attacked by hackers somewhere in China, but decided not to disclose the intrusion. Barr resigned three weeks later, citing the distraction caused by the hack.

DuPont declined to comment after the HBGary incident, as did Sony and Johnson & Johnson. Disney didn't respond to requests for comment.

Lulz Security, known as LulzSec and made up of former members of Anonymous, announced June 25 it is disbanding after 50 days during which it claimed attacks on computers of the U.S. Senate, Public Broadcasting Service television network and Central Intelligence Agency. Spanish police arrested three suspected members of Anonymous on June 10.

To better thwart attacks targeting decision makers, Santa Clara, California-based Intel is deploying software to analyze employees' log-on patterns, Harkins said. If a user logs on in New York an hour after logging on from a California web address, the system may limit or cut off access.

New Products

"That's the work we are doing right now," Harkins said, citing an increase in security spending. "It will take a couple of years." A number of companies are now offering analytics and security products designed to combat social-engineered attacks.

In February, Milpitas, California-based FireEye announced a system designed to stop spear-phishing. Its software can open an e-mail attachment or a link outside of the corporate network, run it to see if it's malicious, and report back on the scope of the planned attack, Ashar Aziz, FireEye's Chief Executive Officer, said in an interview. "This is the deadliest sector of attack that exists today," he said. The company already provides the product to several governmental agencies, he said.

Another vendor, CertiVox, started selling a product last week that lets users safeguard their Web e-mails and online posts on Facebook or blogs. Through encryption, the messages are readable only to recipients picked by the sender. The company, with offices in San Francisco andLondon, is testing the software with large law firms in London, CEO Brian Spector said in an interview.

Trying to Keep Up

"The security industry is still stuck in infrastructure 1.0," Spector said. "As the Web 2.0 world started taking off, it wasn't keeping up."

Training may be the biggest key to stopping the attacks. Hudson Valley Credit Union in Poughkeepsie, New York, experienced a spear-phishing attack five years ago. Now, each of the company's more than 800 employees takes an annual online security training course, said John Brozycki, the credit union's information security officer. Each year, the course expands to include new schemes and provides a refresher on long-time problems like phishing.

"We hope that our defenses are able to handle it," Brozycki said.

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