Source: Matt Richtel, *The New York Times*, 21 Sep 2011, B1. The Full Tilt Poker website (run offshore from the U.S., of course) “was not a legitimate poker company but a global Ponzi scheme," according to P.S Bharara, U.S. attorney. Entrusted with $390 million of gamblers' money, FTP managed to transfer these funds to its owners and managers. The gamblers were “taking on far more risk than they realized, even when they had no chips on the virtual table.'' RISKS has long warned about trusting untrustworthy third parties, but this case brings some of the risks of cloud computing home to roost quite dramatically.
ALL of the "Big Four" accounting firms listed in the attached article do the same thing: send soi disant "auditors" around who look like they just graduated high-school but wear expensive suits and >$800 ties/shoes. And who work from stale checklists. And don't know what the hell they do (and never will). But they wear expensive clothing. I have seen the look of amazing ignorance and stupidity on the faces of these "auditors" so many times that it has gotten burned into my neurons to such a remarkable degree that if re-incarnation actually happens then while I might forget my own ego I will certainly never forget that idiotic look. I can spot it instantly, like an experienced cop can spot a drunken driver (the same look, actually; cops call it "drunk eyes"—a characteristic beady far-off unfocused felonious stare that denotes a person totally non-functional, non-ethical, and out-of-touch). I could tell a few hundred horror stories about them. Like a place that only a few days ago (and which you will definitely not hear about in the news) that found out that, contrary to these very sartorially expensive auditors, they actually *didn't* do backups even though everyone thought they did (the software logs said so!), which came as a rather horrible, shocking, and sickening surprise. The operators didn't bother changing the tapes (but the software logs showed everything okay!) and therefore they wound up using the same tapes over-and-over again, including the ones that should have had the archival data for last year or so (the surveillance video in the computer room shows the operators zoned out and staring into space for long periods of time). Of course, the expensive auditors didn't actually do something as remarkably simple and basic as checking the written backup log for consistency—wait a tick . . . WHAT backup log? Oops! (In fairness: the IT director should get the ax too, but that never happens.) My favorite first-hand auditor horror story though: the remarkably high-profile place that had ZERO access control. I do mean ZERO access control. You want root access? No problem! Just connect to the system (remotely works just fine!) and you'd get a nice Unix root shell prompt and total and unaudited access. Where you could easily and with no risk at all rob them blind (I don't *think* it happened for some reason that still eludes me; just lucky, I guess). Did I mention publically available remote access with no access control of any sort? Not even security-by-obscurity. These brain dead suits from PriceWaterhouse Coopers didn't notice (did I *really* name that prestigious Big Four company?). Someone send an apology consultant to them. The article: Kevin Gray, Deloitte sued for $7.6 billion, accused of missing fraud (Reuters) http://news.yahoo.com/deloitte-sued-7-6-billion-accused-missing-fraud-215604966.html Deloitte Touche Tohmatsu Ltd , the world's largest accounting and consulting firm, was accused on Monday of failing to detect fraud during its audits of one of the biggest private mortgage firms to collapse during the U.S. housing crash. A trust overseeing the bankruptcy of Taylor, Bean & Whitaker Mortgage Corp, or TBW, and one of the company's subsidiaries filed complaints in a Miami Circuit Court claiming a combined $7.6 billion in losses. Deloitte "certified TBW as a solvent, viable company with accurate financial statements every year from 2001 to 2008," one of the complaints said. "Despite Deloitte's credentials and expertise as one of the 'Big 4' accounting firms, those statements—and the rosy picture they depicted of TBW—were completely false," it said. Deloitte spokesman Jonathan Gandal said the "claims are utterly without merit." It was the latest lawsuit to hit one of the major accounting firms over their role in the credit crisis. PriceWaterhouse Coopers, KPMG and Ernst & Young are also facing accusations about their auditing standards by investors who collectively seek to recoup billions of dollars lost in the financial meltdown. Lee Farkas, the former chairman of Taylor, Bean and Whitaker, was sentenced to 30 years in prison in April for masterminding what U.S. officials described as one of the biggest bank frauds ever. U.S. Justice Department officials said Farkas ran a $2.9 billion fraud scheme that led to TBW's downfall and the collapse of one of the largest U.S. regional banks, Colonial Bank. The complaint filed by Neil F. Luria, a plan trustee of Taylor, Bean & Whitaker Trust, claims losses of approximately $6 billion. A second complaint by Ocala Funding, a wholly owned TBW subsidiary which served as a lending facility, claims losses of $1.6 billion. Farkas was accused of running a wide-ranging scheme to cover up large losses at Taylor, Bean, which was based in Ocala, Florida, by moving funds between accounts at Colonial Bank and also by selling mortgage loans that either did not exist, were worthless or had already been sold. "Deloitte missed this fraud because it simply accepted management's conflicting, incomplete and often last-minute explanations of highly-questionable transactions, even though those explanations made no sense and were flatly contradicted by the documents in Deloitte's possession," the complaint by Ocala Funding said. "Ocala relied on Deloitte to detect material misstatements in the financial statements due to error or fraud," the complaint said. Gandal said the plaintiffs in the cases were "companies through which convicted felon Lee Farkas and his co-conspirators committed their crimes. The bizarre notion that his engines of theft are entitled to complain of injury from their own crimes and to sue the outside auditors they lied to defies common sense, not to mention the law." Several other Taylor, Bean and Colonial Bank employees who pleaded guilty for their roles in the fraud were also sentenced earlier this year. (Editing by Bernard Orr)
http://j.mp/nuv56t (Zdziarski) "So the GPS location of your vehicle and your vehicle's speed are going to be collected by OnStar and sold to third parties. What kind of companies are interested in this data? OnStar would have you believe that respectable agencies, like departments of transportation and various law enforcement agencies (for purposes of "public safety or traffic services" - A.K.A ticket writing). I can imagine this data COULD be used for good, to create traffic based analytics to improve future road construction or even emergency response. But given that those types of decisions are only made once a decade in most cities, OnStar isn't likely to benefit much financially from "respectable" companies." - - - The key aspects of this that are most disturbing are the apparent lack of any user choice in these regards (except by totally eliminating the service *and the data connection*!) and the provision of data to law enforcement. OnStar is really becoming quite problematic in key respects, and may now have crossed the infamous "creepy" line. Lauren Weinstein (email@example.com): http://www.vortex.com/lauren People For Internet Responsibility: http://www.pfir.org Skype: vortex.com Network Neutrality Squad: http://www.nnsquad.org +1 (818) 225-2800 [See also Brendan Sasso, Franken and Coons urge OnStar to reverse privacy changes, *The Hill*, 22 Sep 2011. PGN] http://thehill.com/blogs/hillicon-valley/technology/183387-franken-and-coons-urge-onstar-to-reverse-privacy-changes
Posted on September 20, 2011 by Jonathan Zdziarski http://www.zdziarski.com/blog/?p=1270 I canceled the OnStar subscription on my new GMC vehicle today after receiving an e-mail from the company about their new terms and conditions. While most people, I imagine, would hit the delete button when receiving something as exciting as new terms and conditions, being the nerd sort, I decided to have a personal drooling session and read it instead. I'm glad I did. OnStar's latest T&C has some very unsettling updates to it, which include the ability to sell your personal GPS location information, speed, safety belt usage, and other information to third parties, including law enforcement. To add insult to a slap in the face, the company insists they will continue collecting and selling this personal information even after you cancel your service, unless you specifically shut down the data connection to the vehicle after canceling. ...
Hiawatha Bray: Firms increasingly targets for hackers, Coakley warns, *The Boston Globe*, 21 Sep 2011 Personal information from nearly one out of three Massachusetts residents, from names and addresses to medical histories, has been compromised through data theft or loss since the beginning of 2010, according to statistics released yesterday by the office of Attorney General Martha Coakley. A state law enacted in 2007 requires all companies doing business in Massachusetts to inform consumers and state regulators about security breaches that might result in identity theft. That could include leaks of individual names along with other sensitive information, such as Social Security numbers or bank account, credit card, and debit card numbers. The law was passed in 2007, after hackers stole 45 million credit card numbers from Framingham-based retailer TJX Cos. Coakley said that her office is just beginning to analyze the reports to find out whether the law is helping to reduce data breaches. But she predicted the problem will get worse as more Americans store vital personal data on various computer networks. "There is going to be more room for employee error, for intentional hacking,'' Coakley said. "This is going to be an increasing target.'' The attorney general's office has received 1,166 data breach notices since January 2010, including 480 between January and August of 2011. About 2.1 million residents were affected by the various incidents, though it's unknown whether any of them were actually defrauded as a result of the data leaks. ... http://www.boston.com/business/technology/articles/2011/09/21/two_million_mass_residents_hit_by_data_breach_leaks/
The longer I look at Facebook, the more questions I have about it. First there is this: http://nikcub-static.appspot.com/logging-out-of-facebook-is-not-enough * Logging out of Facebook is not enough. (Some members on this list may remember a private discussion I had with them about the danger of Facebook buttons a while back). But there appears to be more, although I have not been able to pinpoint yet what exactly happened. It appears Facebook can do other things by itself that you would have expected to require human input. Anyone ever heard of a picture being tagged in Facebook without the poster or anyone else doing it? I have been briefed on an incident where an image of person A was uploaded by person B (who has person A in a very small circle of friends). Subsequently, person A gets a notification that an image of them was uploaded. Where it gets interesting: * Person A's account has otherwise no images associated with it. Thus, the facial biometrics that could be used to ID someone (and ferret out duplicate accounts) should not be available. The reason for the lack of images was to avoid publicity—the account is not in a real name. In hindsight, that emerged as a very good move. * Nobody appears to have tagged the image as containing person A, nor is there any Facebook notification which suggests this had happened. * Person A has another, more public account, WITH images. This received no notification either. The question is thus how Facebook managed to establish the relationship. Personally, I'm still betting on someone tagging and then removing the tag (especially since it happened in a rather small group of individuals and hit what was in principle the wrong account), but the notification of that action is missing. I'm going to run some tests over the next few weeks, but I'd be interested to hear of any other incidents where data unexpectedly has been linked. Ideas welcome.
http://www.infoworld.com/t/social-networking/facebook-makes-it-easier-ever-eavesdrop-173657 InfoWorld Home / InfoWorld Tech Watch September 21, 2011 Facebook makes it easier than ever to eavesdrop The new mini stream feature makes it simple to see what people are saying, even when they might not realize you're listening By Ted Samson | InfoWorld selected text: What's concerning, though, is the nature of some of the changes that Facebook has made to counter Google+ in this match-up. At least one feature is almost certainly going to generate controversy: A new mini feed, combined with Facebook's new Subscription options, makes it disturbingly easy to effectively eavesdrop on fellow Facebook friends—that is, to peer in on exchanges between your Facebook friends, both with mutual pals and people who are complete strangers to you. This should be of particular concern for all the Facebook users who use the site both to interact with real-life friends on a personal level, as well as family members, coworkers, and colleagues.
Am I the only one who has spotted increased attempts at mobile phone number acquisition? At the moment, personal mobile phone numbers are the last vestige of privacy -- guess what sites like Facebook and even Hotmail are now asking for under the pretext of *cough* "extra security" *cough*? It's not even subtle: the coercion is extremely aggressive, with frequent messages popping up in the middle of any usage to more or less harass you into providing more data (another one is other email addresses you may have). Now imagine you have given your number, and the price of SMS messages drops. Unlike any other service, SMS traffic cannot be disabled other than by killing the phone service itself. The only barrier between you and spam or DDoS is cost. None other.
The US Air Force issued a major revision to its Instruction 51-402 (27Jul2011), changing its title and including "cyber capabilities". The document "Legal Review of Weapons and Cyber Capabilities" seems to require looking at risks: 3. Contents of the Legal Review of Weapons and Cyber Capabilities. ... * 184.108.40.206. Whether the weapon or cyber capability is calculated to cause superfluous injury, in violation of Article 23(e) of the Annex to Hague Convention IV; and * 220.127.116.11. Whether the weapon or cyber capability is capable of being directed against a specific military objective and, if not, is of a nature to cause an effect on military objectives and civilians or civilian objects without distinction. The scope of cyber capabilities is given as: * Cyber Capability. For the purposes of this Instruction, an Air Force cyber capability requiring a legal review prior to employment is any device or software payload intended to disrupt, deny, degrade, negate, impair or destroy adversarial computer systems, data, activities or capabilities. Cyber capabilities do not include a device or software that is solely intended to provide access to an adversarial computer system for data exploitation. * Cyberspace Operations. A cyberspace operation is the employment of cyber capabilities where the primary purpose is to achieve objectives in or through cyberspace. Such operations include computer network operations and activities to operate and defend the Global Information Grid.
Geoff Kuenning wrote: > But of course passengers will still be prohibited from using those same > devices while the pilots have them turned on... As well they should IMHO. AFAICT, the most "eventful" times during flight tend to occur during take off and landing, and passengers should be aware of their environment in case an emergency happens. Similarly the pilots are not playing Angry Birds during take offs and landings (we hope), but rather concentrating on the controls of the plane. I think it's long been shown that consumer electronics don't really interfere with (most) aviation electronics, and that the real reason is for situation awareness. (Personally I don't see what the fuss is about: is it really such a big deal to "switch off" for twenty or so minutes at the beginning and end of a flight? But that's just my personality.)
I've been in a Boeing 777 that made a heavy landing in storm conditions (not a crash, just a heavy landing involving several touchdowns before the plane finally stayed on the ground); it was sufficiently bad that improperly closed overhead lockers broke open, and objects (pens, paper notebooks, the odd netbook computer) hurled free from the lockers damaged bulkheads to the point where the aircraft would have to be taken out of service for repairs. Because Boeing considered this risk when the plane was designed, objects that flew free of the damaged overhead lockers flew down the aisle, and were therefore unlikely to injure anyone. The experience leads me to believe that in a crash, some hand-held devices would be thrown free from their operator with sufficient force to pose a risk of head injury to an unfortunate passenger in front, with all the accompanying problems when you try to evacuate the crashed airliner.
The discussion of iPad and other wireless devices on airplanes begs a question that drives me crazy because it is not often enough asked: If they require everyone to turn off wireless capabilities to avoid interference with instruments and communication (I trust there is a safety argument as well), is this not also a confession that there IS a vulnerability? It seems to me that it would take little effort to construct a multi-frequency jammer powerful to cause serious problems. So should not the primary goal be to harden critical systems against interference and, once achieved, stop worrying about the consumer electronics? I suspect the risk of interference is indeed small, with the exception of the deliberate terrorist ploy I suggest. Blinding a *glass cockpit* aircraft in a thunderstorm could have dire consequences, especially, as we have seen, with flight crews' increasing dependence on automation.
> I think it's long been shown that consumer electronics don't really > interfere with (most) aviation electronics, and that the real reason is > for situation awareness. This argument doesn't even begin to hold water. If situational awareness is so important, why is my neighbor prohibited from reading the newspaper on her iPad while it's OK for me to do the same with a physical--and physically larger--copy of the New York Times? The same goes for tons of other alleged distractions, of course, but no passenger is less situationally aware than the napping one. I suspect that every flight attendant has a story about someone who had to be shaken awake after every else on the plane had departed. > (Personally I don't see what the fuss is about: is it really such a big > deal to "switch off" for twenty or so minutes at the beginning and end of > a flight? But that's just my personality.) Disregarding the issue of whether it's appropriate to pass judgment on another person's choice of how to use his time, I'll answer personally: yes, it can be a huge deal. It's often the case that those twenty minutes will come directly out of my already shortened sleep that night. Keep trying, and keep the best.
[From a *WSJ* article explaining what your business should do if you find indications you've been successfully attacked:] "Don't unplug. The natural instinct when an employee discovers he or she has been hacked is to power off the machine (and maybe throw it against the wall in frustration). "But it's the wrong move. "True, turning off the Internet connection and detaching the computer from the corporate network can help prevent the infection from spreading. But shutting the machine down can also erase valuable evidence that will help investigators determine what's been stolen and where it's been sent. A lot of malware - a catchall term for programs like viruses written and installed by hackers - resides in a computer's memory and not on the hard drive. Turning off a computer erases the memory, and with it many traces of the hack, security experts say." http://online.wsj.com/article/SB10001424053111904265504576566991567148576.html My opinion: that's a Feb 25, 1993, attitude. Your system is compromised. Smash the intruder, now. Finding the bad guy would be nice, but secondary.
Mark Bowden WORM: The First Digital World War Atlantic Monthly Press x+245 NY NY 2011 [Published today] This is a marvelous book on the people behind the Conficker Cabal who reverse engineered and analyzed Conficker. There is also a little on Stuxnet, reverse engineering, and related subjects. Bowden is well known for Black Hawk Down, and is a compelling writer. [Disclaimer: Several of the people featured in the book are my friends, colleagues, and long-time RISKS readers. PGN] See also the article in *Atlantic Monthly*: http://www.theatlantic.com/magazine/archive/2010/06/the-enemy-within/8098/
BKABVCLD.RVW 20110323 "Above the Clouds", Kevin T. McDonald, 2010, 978-1-84928-031-0, UK#39.95 %A Kevin T. McDonald %D 2010 %G 978-1-84928-031-0 1-84928-031-2 %I IT Governance %O UK#39.95 %O http://www.amazon.com/exec/obidos/ASIN/1849280312/robsladesinterne http://www.amazon.co.uk/exec/obidos/ASIN/1849280312/robsladesinte-21 %O http://www.amazon.ca/exec/obidos/ASIN/1849280312/robsladesin03-20 %O Audience n+ Tech 1 Writing 1 (see revfaq.htm for explanation) %P 169 p. %T "Above the Clouds: Managing Risk in the World of Cloud Computing" The preface does a complicated job of defining cloud computing. The introduction does provides a simpler description: cloud computing is the sharing of services, at the time you need them, paying for the services you need or use. Different terms are listed based on what services are provided, and to whom. We could call cloud computing time-sharing, and the providers service bureaus. (Of course, if we did that, a number of people would think they'd walked into a forty- five year time-warp.) The text is oddly structured: indeed, it is hard to find any organization in the material at all. Chapter one states that the cloud allows you to do rapid prototyping because you can use patched operating systems. I would agree that properly up-to-date operating systems are a good thing, but it isn't made clear what this has to do with either prototyping or the cloud. There is a definite (and repeated) assertion that "bigger is better," but this idea is presented as an article of faith, rather than demonstrated. There is mention of the difficulty of maintaining core competencies, but no discussion of how you would determine that a large entity has such competencies. Some of the content is contradictory: there are many statements to the effect that the cloud allows instant access to services, but at least one warning that you cannot expect cloud services to be instantly accessible. Various commercial products and services are noted in one section, but there is almost no description or detail in regard to actual services or availability. Chapter two does admit that there can be some problems with using cloud services. Despite this admission some of the material is strange. We are told that you can eliminate capacity planning by using the cloud, but are immediately warned that we need to determine service levels (which is just a different form of capacity planning). In terms of preparation and planning, chapter three does mention a numb of issues to be addressed. Even so, it tends to underplay the full range of factors that can determine the success or failure of a cloud project. (Much content that has been provided previously is duplicated here.) There is a very brief section on risk management. The process outline is fine, but the example given is rather flawed. (The gap analysis fails to note that the vendor does not actually answer the question asked.) SAS70 and similar reports are heavily emphasized, although the material fails to mention that many of the reasons that small businesses will be interested in the cloud will be for functions that are beyond the scope of these standards. Chapter four appears to be about risk assessment, but then wanders into discussion of continuity planning, project management, testing, and a bewildering variety of only marginally related topics. There is a very terse review of security fundamentals, in chapter five, but it is so brief as to be almost useless, and does not really address issues specifically related to the cloud. The (very limited) examination of security in chapter six seems to imply that a good cloud provider will automatically provide additional security functions. In certain areas, such as availability and backup, this may be true. However, in areas such as access control and identity management, this will most probably involve additional charges/costs, and it is not likely that the service provider will be able to do a better job than you can, yourself. A final chapter suggests that you analyze your own company to find functions that can be placed into the cloud. Despite the random nature of the book, the breadth of topics means it can be used as an introduction to the factors which should be considered when attempting to use cloud computing. The lack of detail would place a heavy burden of research and work on those charged with planning or implementing such activities. In addition, the heavily promotional tone of the work may lead some readers to underestimate the magnitude of the task. copyright, Robert M. Slade 2011 BKABVCLD.RVW 20110323 firstname.lastname@example.org email@example.com firstname.lastname@example.org victoria.tc.ca/techrev/rms.htm http://www.infosecbc.org/links
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