Cybersecurity Map of United StatesCISA Cybersecurity Advisory – Chinese State-Sponsored Cyber Operations

CISA Cybersecurity Advisory – Chinese State-Sponsored Cyber Operations

On July 19th, the National Security Agency, Cybersecurity and Infrastructure Security Agency (CISA), and the Federal Bureau of Investigations (FBI) released a joint cybersecurity advisory pertaining to Chinese state-sponsored threat actors. The advisory warns of potential malicious activity targeting “U.S. and allied political, economic, military, educational, and critical infrastructure (CI) personnel and organizations.”  

In response to this increased threat, CISA suggests organizations, particularly managed service providers, semiconductor companies, the Defense Industrial Base (DIB), universities, and medical institutions, take the following steps: 

Patch your systems as soon as you can after the release of operating system and application patches.  Updates are often quickly reverse-engineered by threat actors to determine the vulnerability that is being fixed and whether it can be weaponized. 

Employ monitoring and detection technologies give you a 360-degree view of what is happening on your network.  Be sure you can see lateral movement, which may show indicators of compromise, inside-out traffic to malicious hosts, which may indicate command and control communication, and outside-in communication, which could reflect attempts at compromise from external sources.   

Implement strong preventative measures to mitigate or help prevent compromise from occurring.  These include active anti-virus and multi-factor authentication. 

Read the full cybersecurity advisory issued by CISA here. While this alert focuses on businesses that would be potential targets for nation-state threat actors, the advice above is applicable to any business. Following these best practices does not guarantee the prevention of a security incident but can make it substantially more difficult for threat actors to gain a foothold in an organization’s network and systems and can reduce detection time. 

If you suspect any malicious activity in your systems, or would like to speak to an incident response attorney to help improve your organization’s security, Beckage attorneys can be reached 24/7 via our Data Breach Hotline: 844.502.9363 or IR@beckage.com.  

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AIAccountability and the Use of Artificial Intelligence

Accountability and the Use of Artificial Intelligence

As artificial intelligence (“AI”) and automated decision-making systems make their way into every corner of society – from businesses and schools to government agencies – concerns about using the technology responsibly and accountability are on the rise. 

The United States has always been on the forefront of technological innovations and our government policies have helped us remain there.  To that end, on February 11, 2019, President Trump issued an Executive Order on Maintaining American Leadership in Artificial Intelligence (No. 13,859).  See Exec. Order No. 13,859, 3 C.F.R. 3967.  As part of this Executive Order, the “American AI Initiative” was launched with five guiding principles:

  1. Driving technological breakthroughs; 
  2. Driving the development of appropriate technical standards; 
  3. Training workers with the skills to develop and apply AI technologies; 
  4. Protecting American values, including civil liberties and privacy, and fostering public trust and confidence in AI technologies; and
  5.  Protecting U.S. technological advantages in AI, while promoting an international environment that supports innovation. Id. at § 1. 

Finally, the Executive Order tasked the National Institute of Standards and Technology (“NIST”) of the U.S. Department of Commerce with creating a plan for the development of technical standards to support reliable, robust, and trustworthy AI systems.  Id. at § 6(d). To that end, the NIST released its Plan for Federal Engagement in Developing Technical Standards in August 2019.  See Nat’l Inst. of Standards & Tech., U.S. Leadership in AI: A Plan for Federal Engagement in Developing Technical Standards and Related Tools (2019). 

While excitement over the use of AI was brewing in the executive branch, the legislative branch was concerned with its accountability as on April 10, 2019, the Algorithmic Accountability Act (“AAA”) was introduced into Congress.  See Algorithmic Accountability Act of 2019, S. 1108, H.R. 2231, 116th Cong. (2019).  The AAA covered business that: 

  1. Made more than $50,000,000 per year;
  2. Held data for greater than 1,000,000 customers; or
  3. Acted as a data broker to buy and sell personal information.  Id. at § 2(5). 

The AAA would have required business to conduct “impact assessments” on their “high-risk” automated decision systems in order to evaluate the impacts of the system’s design process and training data on “accuracy, fairness, bias, discrimination, privacy, and security”.  Id. at §§ 2(2) and 3(b).  These impact assessments would have required to be performed “in consultation with external third parties, including independent auditors and independent technology experts”.  Id. at § 3(b)(1)(C).  Following an impact assessment the AAA would have required that business reasonably address the result of the impact assessment in a timely manner.  Id. at § 3(b)(1)(D).  

It wasn’t just the federal government who is concerned about the use of AI in business as on May 20, 2019, the New Jersey Algorithmic Accountability Act (“NJ AAA”) was introduced into the New Jersey General Assembly.  The NJ AAA was very similar to the AAA in that it would have required businesses in the state to conduct impact assessments on “high risk” automated decisions. See New Jersey Algorithmic Accountability Act, A.B. 5430, 218th Leg., 2019 Reg. Sess. (N.J. 2019).  These “Automated decision system impact assessments” would have required an evaluation of the systems development “including the design and training data of the  automated  decision  system,  for  impacts  on accuracy,  fairness,  bias,  discrimination,  privacy,  and  security” as well as a cost-benefit analysis of the AI in light of its purpose.  Id. at § 2.  The NJ AAA would have also required businesses work with independent third parties, record any bias or threat to the security of consumers’ personally identifiable information discovered through the impact assessments, and provide any other information that is required by the New Jersey Director of the Division of Consumer Affairs in the New Jersey Department of Law and Public Safety.  Id

While the aforementioned legislation has appeared to have stalled, we nevertheless anticipate that both federal and state legislators will once again take up the task of both encouraging and regulating the use of AI in business as the COVID-19 pandemic subsides.  Our team at Beckage contains attorneys who are focused on technology, data security, and privacy and have the experience to advise your business on the best practices for the adoption of AI and automated decision-making systems. 

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CozyBear BreachOngoing Cyber Attack Uses SolarWinds Software Update to Distribute Malware

Ongoing Cyber Attack Uses SolarWinds Software Update to Distribute Malware

Beckage’s Incident Response Team is monitoring an evolving hacking campaign that is leveraging a popular managed service provider named SolarWinds.

What happened?

Beginning over the weekend, multiple organizations around the globe, including United States government agencies, have been targeted by a hacking campaign reportedly carried out by a Russian organization known as CozyBear, APT29, or UNC2452.  While cybersecurity officials are currently scrambling to implement countermeasures, initial signs suggest this campaign has been running for months. 

Who has been affected?

FireEye, an American cybersecurity firm that was one of the organizations accessed, has led much of the analysis on this sophisticated cyber attack.  Other victims so far include government agencies, consulting, technology, telecom, and oil and gas companies across North America, Asia, Europe, and the Middle East.

How was this attack carried out?

The attackers used a trojanized SolarWinds Orion business software update to distribute a backdoor called SUNBURST.  Once this Trojan has infiltrated a server, the attackers are able to remotely control the devices on which this update has been installed.  They can use this access to move freely throughout an organization’s server, installing additional software, creating new accounts, and accessing sensitive data and valuable resources.  By confirming itself as an authorized user, the attackers may be able to maintain this access even if the SolarWinds backdoor is removed, creating a slew of additional issues that may present themselves in the future.

The SUNBURST malware is stealthily designed to make it very difficult to determine whether a computer has been affected.  After the backdoor has accessed a device, it waits quietly for a period of 12 to 14 days before taking any action.  Once activated, the attacker sets the hostnames on their command and control infrastructure to match a legitimate hostname found within the victim’s environment.  This allows the attacker to blend into the environment, avoid suspicion, and evade detection.  The attackers also use primarily IP addresses originating from the same country as the victim, leveraging Virtual Private Servers.

What to do now

Beckage recommends that organizations using SolarWinds as a provider implement several preventative steps to safeguard their organization including of the following measures:

  • Review current incident response protocols and processes.
  • Carefully craft internal and external messaging and FAQs with an experienced data breach attorney.
  • Make sure employees know who to contact if they have reason to believe there is suspicious activity.

Beckage has extensive experience dealing with headline-making data incidents similar to the CozyBear attack.  Our team can assist you with implementing urgent preventative actions to avoid falling pray to this attack.  If your systems have been accessed, we can work to minimize your legal exposure and regulatory vulnerabilities and manage response efforts and communications with any relevant stakeholders.

If an attack is detected and additional resources are needed, Beckage can be reached using our 24/7 Data Breach Hotline at 844-502-9363.

The Big Take Away

Attackers continue to target service providers.  This incident is one more piece of evidence that service providers are highly desirable and valuable businesses to compromise because they can provide an attacker with access to many, many clients.  Attackers are looking for the hub of the wheel, so they can expand into all the spokes and carry out many simultaneous breaches.

This reality makes vendor management programs, including vendor security audits and initial security questionnaires of service providers more essential than ever.  Beckage’s clients benefit from our counsel on vetting vendors and service providers in order to mitigate risk of falling victim to a cyber attack because of a vendor compromise.

A Holiday Reminder on Malicious Activity

Phishing campaigns, email compromise, and ransomware activities are extremely common around the holiday season. As a reminder, be sure your organization is being diligent in your efforts against these types of attacks even if you have not been affected by this particular incident.

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RansomwareRansomware Activity Targeting the Healthcare and Public Health Sector

Ransomware Activity Targeting the Healthcare and Public Health Sector

Beckage is notifying organizations in the healthcare sector of a potential threat that may occur this weekend. We will continue to monitor this situation and provide updates as they occur.

Late last night the Federal Bureau of Investigations (FBI), Department of Health and Human Services (HHS), and the Cybersecurity and Infrastructure Security Agency (CISA) issued a warning about an imminent cybercrime threat to hospitals and healthcare providers. These organizations have credible information to suggest that there will be a widespread Ryuk ransomware attack this weekend. The threat is currently being investigated by the FBI, DHS and the NSA’s Cybersecurity Threat Operations Center.

What We Know

The cybercrime organization Ryuk is targeting the Healthcare and Public Health sector with Trickbot malware that may lead to ransomware attacks, data theft, and the disruption of healthcare services, a particularly concerning possibility considering the nation is still grappling with the COVID-19 pandemic.

Based on what we know about Ryuk, it is possible that the targeted healthcare entities have already implemented the encryption malware on healthcare organizations’ systems and the threat actors just have not commanded it to activate.  Given the threat, we urge all healthcare organizations to review the measures recommended by the FBI as consider some practical incident response measures.

What To Do Next

Beckage recommends that hospitals and healthcare providers implement several preventative steps to safeguard their organization including of the following measures: reviewing current incident response protocols and processes within the next 24 hours, and carefully crafting internal drafting internal and external messaging and FAQs with an experienced data breach attorney to help minimize legal risk as well as making sure employees know who to contact if they have reason to believe there is suspicious activity.

Beckage is available to discuss additional best practices that should be taken over the next 24 to 72 hours. Our team will continue to monitor this for new developments and provides updates as appropriate.  If an attack is detected and additional resources are needed, Beckage can be reached using our 24/7 Data Breach Hotline at 844-502-9363.

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SAFE DATA ActLegislative Update on the SAFE Data Act

Legislative Update on the SAFE Data Act

In late September, a few Republican members of the Senate Committee on Commerce, Science and Transportation (“Commerce Committee”) introduced the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act, adding to the slew of federal data privacy bills before the Committee.

The Safe Data Act would enhance the Federal Trade Commission’s (FTC) authority and provide additional enforcement resources.  The Safe Data Act contains some measures captured in other bills before the Commerce Committee, including the Deceptive Experiences to Online Users Reduction Act (Detour Act), the Balancing the Rights of Web Surfers Equally and Responsibly Act (Browser Act), and the Consumer Online Privacy Rights Act (COPRA).  It provides consumers with more control over their data and strengthens the FTC’s ability to respond to changes or advancements in technology.  

If enacted, the Safe Data Act would prohibit businesses from processing or transferring sensitive consumer data without their consent.  The Safe Data Act would also minimize the amount of consumer data businesses can collect, process, and retain, and would limit secondary uses of consumer data without consumer consent.  

The Safe Data Act attempts to create a national standard that would preempt or supersede state privacy laws.  A federal standard could, in theory, ease the burden on businesses that currently need to comply with a complicated patchwork of state and local privacy laws.  This preemption issue captured a lot of attention during Committee testimony on September 23rd, particularly from California Attorney General Xavier Becerra, who argued that a federal standard should be the floor rather than the ceiling for privacy standards.  Earlier this year, Becerra oversaw the implementation of California Consumer Privacy Act—the nation’s most comprehensive state data protection statute to date—which, he said would be heavily dismantled by Federal preemption.  Another issue that has captured attention during the Committee hearing is whether federal legislation should include a private right of action, which would allow consumers to pursue legal remedies themselves.

The bottom line?  There are several approaches being considered and little agreement on the path forward.  Though we expect the conversation to continue into Lame Duck, we do not anticipate consensus on a unified approach to data privacy until the 117th Congress in January 2021.

Beckage continues to monitor this evolving landscape and provide updates on important topics such as data privacy, which have a very real impact on business operations.  Regardless of the legislative landscape, a robust data security and privacy program that can stand the test of time is a wise investment.  Our team is available to assist your team evaluate legal implications of current requirements and legislative changes in the data privacy field.

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