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Hackers attacked government, defense contractors and banks by exploiting a flaw in IE

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May 2, 2014

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According to internet security consultant FireEye, a group of hackers have apparently attacked several U.S. government agencies, defense contractors, energy companies and banks by exploiting the now well known security hole in Microsoft's Internet Explorer.

FireEye is the cybersecurity company that revealed the software bug last week. The company discovered that hackers took advantage of a software design flaw in the Internet Explorer Web browser to secretly take control of computers.

The cyber attack has been called "Operation Clandestine Fox," and affects all versions of Microsoft's IE Web browser. Microsoft has since issued a fix, but FireEye's announcement yesterday greatly underscores that there are already victims.

FireEye also spotted that hackers are now specifically targeting older computers as well running on the outdated Windows XP operating system and those using the Internet Explorer 8 version of the browser.

Among those still using Windows XP are (incredibly) the Defense Department, the IRS and, yes, bank ATMs! And that's a huge issue, because Microsoft has taken its 12-year-old operating system off life-support and ceasing all regularly scheduled security updates.

It's easy to ignore Internet security scares, especially when there's a deluge of news about them. In the month of April alone, the internet community was bombarded with news about the pervasive Heartbleed bug, a massive AOL hack and the Internet Explorer glitch. One arrest has already been made in Canada by the RCMP regarding the Heartbleed bug.

But there are real world consequences. The Heartbleed bug was used to steal personal information of Canadian taxpayers. The AOL hack led to a flood of spam that could link to virus-infected websites or internet sites that contain various forms of malware.

An attack like Clandestine Fox is of the more serious variety-- a cyber reconnaissance mission by a foreign government that reveals weaknesses in industries crucial to the United States' economy, defenses and power.

It targeted power plants, banks, government agencies and military technology, which is essentially a precursor for war, said David Kennedy, CEO of security consulting firm TrustedSec.

"They're going after the core critical infrastructure of the United States, so in the event of a war, they can take it down," Kennedy warned. "The scary part is that the financial sector and energy segment are extremely vulnerable."

A typical power plant, for example, makes expensive investments on equipment that's meant to last decades. It's common to find 1970s-era software on turbines, Kennedy said. But that's a real danger since the internet wasn't publicly accessible until 1994.

"When you have old technology, the defenses they made back then aren't adequate at all today," he said. FireEye wouldn't say who is launching the attack, but offensives of this nature are typically conducted by foreign governments.

In the past, cybersecurity firms have pointed to China and Iran, and still are. We'll keep you informed on these as well as other stories.

In other internet security news

Despite all the numerous recent warnings from security experts around the globe and a massive public awareness campaign, internet users are less aware of the Heartbleed security flaw than other recent risks, and that has the internet community really concerned, especially people at the Pew Research Center.

According to a public survey of 1,500 people conducted by Pew, about 18.3 percent feel they are well aware of the dangers of the security hole, and less than 40 percent have taken action to protect their accounts to a certain degree.

The survey polled internet users on both the level of their awareness on the data-leaking OpenSSL flaw and the various steps they have taken to change credentials which may have been harvested by attackers.

The study of 1,500 American adults was taken in the midst of the Heartbleed scare between the April 23 to 27. During that time, researchers also found that about 59.8 percent of adults had heard of Heartbleed in some form or another, though 41 percent said that they had "a little" information about the security flaw and just 19 percent had heard "a lot" about it.

Additionally, just 39 percent of those polled said they had taken steps to secure their accounts against attacks by changing passwords or canceling unused accounts.

Those numbers, say researchers, indicate far less interest among the public in Heartbleed than other recent security threats. Pew studies in the past found that events such as the Edward Snowden data leaks drew heavy interest from more than half of all internet users, while other recent current events have caught the public attention at a higher rate than Heartbleed coverage.

"The Heartbleed story registered roughly the same level of public awareness as the U.S.-Iran negotiations and agreement to allow monitoring of Iran’s nuclear program in November and December 2013, and Catholic Bishops in the U.S. protesting Obama Administration policies they believe restricted religious liberty (July 2012)," Pew wrote in its report on the survey.

While public awareness is lacking, many of the enterprises and service providers most impacted by Heartbleed have been taking major steps to alleviate the danger posed to their systems by the OpenSSL vulnerability.

While the Heartbleed fix has been a challenge for system administrators, end users can and should reduce their exposure with simple steps such as updating their software and firmware, as well as changing their passwords.

In other internet security news

Earlier today, Microsoft has warned the internet community of a new security hole in all available versions of its Internet Explorer web browser.

Security vulnerability No. CVE-2014-1776, to give the issue its formal name, allows hackers to hijack at-risk Windows computers. It's all due to the way Internet Explorer accesses an object in memory that has been deleted or has not been properly allocated, Microsoft explained to us.

The security vulnerability means that the browser may corrupt memory in a way that could allow an attacker to execute arbitrary code in the context of the current user within Internet Explorer.

"Microsoft is aware of limited, targeted attacks that attempt to exploit this security issue in Internet Explorer," Microsoft added.

"A potential attacker could host a specially crafted website that is designed to exploit this vulnerability through Internet Explorer and then convince a user to view a specific website, most likely containing viruses or some malware.”

And Internet Explorer 6 through 11 are all at risk, on all current versions of Windows from Vista to Windows 8 and even Windows Server 2003 to 2012 R2.

The security problem is understood to be present in IE on Windows XP, although that operating system is no longer supported since April 8, 2014.

Microsoft's recommended reaction to the issue is to deploy version 4.1 of The Enhanced Mitigation Experience Toolkit (EMET), as that software “helps mitigate the exploitation of this vulnerability by adding additional protection layers that make the issue harder to exploit.”

The U.S. Homeland Security's Computer Emergency Readiness Team (CERT) has urged "users and system administrators enable Microsoft EMET where possible and consider employing an alternative web browser until an official update is available".

Microsoft suggests a few other workarounds, such as switching on IE's Enhanced Protected Mode or setting security levels to “High” to stop ActiveX controls and Active Scripting working.

The good news is that Windows Server's default settings make it rather difficult to create the kind of honeypot website that could exploit this security hole.

Microsoft hasn't said for now when a new security patch will be available, but is looking into it. We'll keep you posted on this and other stories as they happen.

In other internet security news

Businesses today really need to lock down their PoS (point-of-sale) systems. However, to a lesser extent, they don't have to worry as much as banks and financial services companies do.

Overall, statistics demonstrate that about 94 percent of all internet security incidents fall into nine basic attack patterns

And web app attacks dominate the financial services sector. Point-of-sale and distributed denial of service attacks plague the retail segment, according to Verizon.

Those are the primary takeaways from Verizon's 2014 Data Breach Investigations Report which included 50 global companies' statistics, 1,367 confirmed data breaches and 63,437 security incidents.

What these security incidents highlight is the risk weighting by industry. "It's a complex landscape and you simply can't take a top 10 list and say that everyone defend against the same things," said Jay Jacobs, senior analyst at Verizon Enterprise Solutions.

But since 2013 was the year of retail attacks -- or at least publicized ones, thanks to Target -- here's a snippet from the report-- "From an attack pattern standpoint, the most simplistic narrative is as follows-- Compromise the POS device, install malware to collect magnetic stripe data in process, retrieve data, and cash in.

All of these attacks share financial gain as a motive, and most can be conclusively attributed (and the rest most likely as well) to organized criminal groups operating out of Eastern Europe. Such groups are very efficient at what they do.

While the majority of these cases look very much alike, the steps taken to compromise the point-of-sale environment offer some interesting variations, the Verizon report suggests.

The most popular PoS attack involves RAM-scraping malware, which grabs payment card data while it's being processed in RAM memory before it's encrypted.

Regarding Web attacks, Verizon's Enterprise unit recommended the following controls:

  • Don't use single-factor password authentication on anything that faces the Internet.
  • Set up automatic patches for any content management system such as Drupal and WordPress.
  • Fix vulnerabilities right away before the bad guys find them.
  • Enforce strict lockout and lockdown policies.
  • Monitor all outbound connections.
  • Overall, insider misuse still remains a huge issue and much of its security still revolves around trusting an individual, often an employee.

    Health care, public sector, and mining are typically the industries with the most lost and stolen laptops. Thefts are often exposed in those industries due to mandatory reporting requirements.

    The United States remains the largest victim of cyberespionage, with South Korea a distant second. State-affiliated actors are 87 percent of cyberespionage cases and 49 percent of them hail from Eastern Asia.

    Verizon's advice for preventing stolen equipment was conventional for the most part: encrypt all devices, back them up carefully and lock them down.

    The wireless carrier added-- "Yes, it's unorthodox as far as recommendations go, but it might actually be an effective theft deterrent, though it will probably increase loss frequency.

    In other internet security news

    The Canadian RCMP (Royal Canadian Mounted Police) has arrested a 19-year old teenager who allegedly used the Heartbleed Internet bug to hack into Canada's revenue tax agency in the last week.

    Shortly after the Internet bug was discovered and revealed to the whole world last week, the Canada Revenue Agency suffered a data breach that leaked the Social Insurance Numbers of about 900 Canadian taxpayers.

    The revenue agency was forced to shut down its website temporarily to prevent further theft of sensitive personal information.

    Today, the RCMP said it arrested Stephen Arthuro Solis-Reyes at his London, Ontario home Tuesday. During the police raid, federal agents seized computer equipment as criminal evidence.

    Solis-Reyes now faces two counts of federal computer-related crimes. He is scheduled to appear in an Ottawa courtroom tomorrow. The arrest appears to be the first related to the Heartbleed bug since it was discovered last week.

    Assuming the federal police arrested the right individual, Solis-Reyes could go down in hacking history. Whoever committed the breach single-handedly delayed the country's tax-return deadline by nearly a week.

    Canada's taxing authority pushed back its tax-filing deadline from April 30 to May 5, a potentially costly wait. The RCMP, who function as federal law enforcement officers, were "working tirelessly over the last four days analyzing data, following leads, conducting interviews, obtaining and executing legal authorizations," said Assistant Commissioner Gilles Michaud.

    In the meantime, the tax agency is carefully combing through its computer systems to determine the extent of the damage.

    "We are currently going through the painstaking process of analyzing other fragments of data, some that may relate to businesses, that were also removed," the Canada Revenue Agency said in a statement.

    To address similar concerns in the United States, the IRS assured taxpayers its systems were secure. The IRS last week told taxpayers to ignore Heartbleed and file their returns anyway.

    If you need reliability when it comes to SMTP servers, get the best, get Port 587.

    Get a powerful Linux Dual-Core dedicated server for less than $2.67 a day!

    Share on Twitter.

    Source: FireEye Internet Security Consultants.

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