Data privacy and securityFox Rothschild partner and firm Chief Privacy Officer Mark G. McCreary sees a trend: Law firms are increasingly recognizing that naming a lawyer to lead data security and privacy efforts is “an essential ingredient in good risk management.”

In an article for Law360 entitled “Notes From A Law Firm Chief Privacy Officer: CPO vs. CISO,” McCreary writes:

“To understand the role of the CPO — and why that person ought to be a lawyer — it’s important to distinguish the role they fill from that of the chief information security officer or CISO, who is typically a nonlawyer and leads the firm’s information technology department.”

We invite you to read his full article.

 

A German cybersecurity firm reports that manufacturers have become a top target of cybercriminals.

The NTT Security Global Threat Intelligence Center (GTIC) Quarterly Threat Intelligence Report for the second quarter of 2017 notes that manufacturers were targeted in 34 percent of incidents, the highest of any industry segment. About a third of those incidents involved “reconnaissance” which suggests the industry is still in hackers’ sights. “If trends from the past few years continue, this probably indicates that attacks and malware are likely to increase in manufacturing organizations in the second half of 2017,” according to the report.

The report also noted a 24 percent increase in attacks on NTT clients in the second quarter and that cyber criminals go-to attack vector has been “phishing emails with malicious attachments containing PowerShell commands in VBA macros.”

Read the full report.

A bipartisan group of Senators wants to make it more difficult for hackers to enlist smart thermostats, wireless security cameras and other connected devices in future cyberattacks.

ZDNet reports that Sens. Mark Warner (D-VA) and Cory Gardner (R-CO) have introduced legislation that would require suppliers of devices to the federal government to ensure connected items such as wearables and smart sensors can be patched with security fixes. The bill would also prohibit the use of hard-coded usernames and passwords, which are considered one of the primary paths malware use to hijack smart devices. In addition, the legislation offers new legal protections to cyber security experts testing connected devices’ digital defenses.

The growing universe of poorly secured smart devices, often referred to as the Internet of Things (IoT), was blamed for last years’ distributed denial of service attack that temporarily took down services such as Twitter, Netflix and Spotify. Click here to read the legislation.

 

One way to measure the increasing importance of cybersecurity to American businesses is to track how often the issue arises as a risk factor in corporate filings with the Securities and Exchange Commission.

A recent analysis by Bloomberg BNA charted a dramatic rise over the past six years, with only a tiny fraction of businesses citing cybersecurity risks in 2011 SEC filings compared to a substantial percentage in the first six months of 2017.

The report notes that a likely reason for the increase was SEC guidance issued in 2011 that clarified when cyber incidents should be disclosed in financial filings, leading to cybersecurity’s being “elevated into the general counsel’s office [and onto] the board’s agenda.”

Read more at Bloomberg BNA’s article Corporate Cyber Risk Disclosures Jump Dramatically in 2017.

Computer networking giant Cisco says the recent WannaCry and Petya/NotPetya incidents signal the advent of a new generation of cyberattacks that is aimed more at mass disruption than financial gain. The new breed of “Destruction of Service” attacks will only grow more sophisticated and potent, the company says in its Cisco 2017 Midyear Cybersecurity Report.

The report warns that cybercriminals “now have the ability—and often now, it seems, the inclination—to lock systems and destroy data as part of their attack process.” The report, released July 20, also lays out new threats posed by the growing network of connected devices known as the “Internet of Things” and examines’ hackers’ continued use of Business Email Compromise (BEC) attacks, which it says accounted for $5.3 billion in cybertheft between 2013 and 2016.

Venerable insurer Lloyd’s of London says a global cyber attack on a major provider of cloud services could carry costs of up to $53 billion, reports Data Breach Today.

That’s a hefty price tag that explains the rising demand for cyber insurance. It also sheds light on why insurers are proceeding extremely carefully. The costs of a major data breach can be significant and difficult to predict.

To help define the level of exposure, Lloyd’s worked with cyber consultant Cyence to produce a new report that outlines the direct economic costs of two types of global cyber attacks and estimates the portion of the loss in each scenario that would covered by insurance. In the case of a cloud services attack, only 17 percent of the loss would be insured, Lloyd’s estimates. In the case of a global attack exploiting a software vulnerability, only 7 percent of the estimated loss of up to $28 billion would be assured.

Analysts estimate the cyber insurance market is worth up to $3.5 billion today and could grow to $7.5 billion by 2020.

Cybersecurity workforce
Copyright: Tawatdchai Muelae / 123RF Stock Photo

Cybersecurity positions are increasingly difficult to fill and the long-term prospects for the industry don’t appear to be getting any brighter, Ericka Chickowski warns at the blog DARKReading. More than 25 percent of organizations take six months or longer to fill priority positions, she reports in “Desperately Seeking Security: 6 Skills Most In Demand.”

By 2022, Chickowski notes, there will be a global shortfall of cybersecurity workers of 1.8 million people, according to the Global Information Security Workforce Study conducted by Frost & Sullivan.

Read more at DARKReading

Acting Federal Trade Commission (FTC) Chairman Maureen K. Ohlhausen made it clear that she expects the FTC’s enforcement role in protecting privacy and security to encompass automated and connected vehicles. In her opening remarks at a June 28, 2017 workshop hosted by the FTC and National Highway Traffic Safety Administration (NHTSA), she said the FTC will take action against manufacturers and service providers of autonomous and connected vehicles if their activities violate Section 5 of the FTC Act, which prohibits unfair and deceptive acts or practices.

Such concern is warranted as new technologies allow vehicles to not only access the Internet, but also to independently generate, store and transmit all types of data – some of which could be very valuable to law enforcement, insurance companies, and other industries. For example, such data can not only show a car’s precise location, but also whether it violated posted speed limits, and aggressively followed behind, or cut-off, other cars.

Acting Chairman Ohlhausen noted that the FTC wants to coordinate its regulatory efforts with NHTSA, and envisions that both organizations will have important roles, similar to the way the FTC and the Department of Health and Human Services both have roles with respect to the Health Insurance Portability and Accountability Act (HIPAA).

Traditionally, NHTSA has dealt with vehicle safety issues, as opposed to privacy and data security. Thus, it may mean that the FTC will have a key role on these issues as they apply to connected cars, as it already has been a major player on privacy and data security in other industries.

Acting Chairman Ohlhausen also encouraged Congress to consider data breach and data security legislation for these new industries, but speakers at the workshop (video available here and embedded below) noted that legislation in this area will have difficulty keeping up with the fast pace of change of these technologies.

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Specific federal legislation, or even laws at the state level, may be slow in coming given the many stakeholders who have an interest in the outcome. Until then, the broad mandate of Section 5 may be one of the main sources of enforcement. Companies who provide goods or services related to autonomous and connected vehicles should be familiar with the basic FTC security advice we have already blogged about here, and should work with knowledgeable attorneys as they pursue their design and manufacture plans.

Yesterday, a massive ransomware attack now known as “Petya” spread across the globe in a similar fashion to the WannaCry cyberattack in May. In an Alert today, Fox Chief Privacy Officer and Partner Mark McCreary breaks down what we know about the attack, how to address it if your organization falls victim to it, and how to minimize the risks of future attacks:

Yesterday’s worldwide cyberattack once again exploited a vulnerability that has been known to experts for many months. These attacks are sure to continue and the best defense is knowledge. Awareness of how malware works and employee training to avoid the human error that may trigger an infection can prevent your organization from becoming a victim.

This latest ransomware variant, referred to as “Petya,” is similar in many respects to the “WannaCry” ransomware that affected hundreds of thousands of computers in mid-May, using the same Eternal Blue exploit to infect computers. The purpose of this Alert is to provide you some information believed or known at this time.

How Is a Computer Infected?

Experts believe the Petya malware is delivered in a Word document attached to an email. Once initiated by opening the Microsoft Word document, an unprotected computer becomes infected and the entire hard drive on that computer is encrypted by the program. This is notably different from WannaCry, which encrypted only files.

Once Petya is initiated, it begins seeking other unprotected computers in the same network to infect. It is not necessary to open the infected Microsoft Word document on each computer. An infection can occur by the malware spreading through a network environment.

To read Mark’s full discussion of the Petya attack, please visit the Fox Rothschild website.

Mark also notes that “I continue to stress to clients that in addition to hardening your IT resources, the absolute best thing your business can do is train employees how to detect and avoid malware and phishing.  In-person, annual privacy and security training is the best way to accomplish this.”

Eric Bixler has posted on the Fox Rothschild Physician Law Blog an excellent summary of the changes coming to Medicare cards as a result of the Medicare Access and CHIP Reauthorization Act of 2015.  Briefly, Centers for Medicare and Medicaid Services (“CMS”) must remove Social Security Numbers (“SSNs”) from all Medicare cards. Therefore, starting April 1, 2018, CMS will begin mailing new cards with a randomly assigned Medicare Beneficiary Identifier (“MBI”) to replace the existing use of SSNs.  You can read the entire blog post here.

The SSN removal initiative represents a major step in the right direction for preventing identity theft of particularly vulnerable populations.  Medicare provides health insurance for Americans aged 65 and older, and in some cases to younger individuals with select disabilities.  Americans are told to avoid carrying their social security card to protect their identity in the event their wallet or purse is stolen, yet many Medicare beneficiaries still carry their Medicare card, which contains their SSN.  CMS stated that people age 65 or older are increasingly the victims of identity theft, as incidents among seniors increased to 2.6 million from 2.1 million between 2012 and 2014.  Yet the change took over a decade of formal CMS research and discussions with other government agencies to materialize, in part due to CMS’ estimates of the prohibitive costs associated with the undertaking.  In 2013, CMS estimated that the costs of two separate SSN removal approaches were approximately $255 million and $317 million, including the cost of efforts to develop, test and implement modifications that would have to be made to the agency’s IT systems – see United States Government Accountability Office report, dated September 2013)

We previously blogged (here and here) about the theft of 7,000 student SSNs at Purdue University and a hack that put 75,000 SSNs at risk at the University of Wisconsin.  In addition, the Fox Rothschild HIPAA & Health Information Technology Blog discussed (here) the nearly $7 million fine imposed on a health plan for including Medicare health insurance claim numbers in plain sight on mailings addressed to individuals.