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'disturbing' levels of cyber-raids

Top GCHQ spook warns of ‘disturbing’ levels of cyber-raids • The Register.

With a crunch conference on government cyber-security starting tomorrow, the director of government spook den GCHQ, Iain Lobban, said Britain had faced a “disturbing” number of digital attacks in recent months.

Attackers had targeted citizens’ data, credit card numbers and industry secrets, Lobban said.

“I can attest to attempts to steal British ideas and designs – in the IT, technology, defence, engineering and energy sectors as well as other industries – to gain commercial advantage or to profit from secret knowledge of contractual arrangements,” the eavesdropping boss added in his article for The Times.

According to Foreign Secretary William Hague there were more than 600 “malicious” attacks on government systems every day, while criminals could snap up Brits’ stolen card details online for just 70 pence a throw.

The statement was paired with the announcement of a £650m investment in cyber-security over the next four years, with both Hague and Lobbman arguing that industry and government need to work together to pull off a safe, resilient system.

Countries that could not protect their banking systems and intellectual property will be at a serious disadvantage in future, Hague told The Times.

The government could have its work cut out, though: security software maker Symantec today suggests that businesses are cutting back on cyber-security and are less aware of and engaged with the big threats than they were last year. Symantec was specifically staring at industries integral to national security.

It found that only 82 percent of them participated in government protection programmes, down 18 points since last year.

Symantec reckoned that reduced manpower meant companies had less time to focus on big structural threats.

“The findings of this survey are somewhat alarming, given recent attacks like Nitro and Duqu that have targeted critical infrastructure providers,” said Dean Turner, a director at Symantec.

“Having said that, limitations on manpower and resources as mentioned by respondents help explain why critical infrastructure providers have had to prioritise and focus their efforts on more day-to-day cyber threats.” ®

Mitsubishi Victim of Chinese cyber attack

BBC News – Japan defence firm Mitsubishi Heavy in cyber attack.

Japan’s top weapons maker has confirmed it was the victim of a cyber attack reportedly targeting data on missiles, submarines and nuclear power plants.

Mitsubishi Heavy Industries (MHI) said viruses were found on more than 80 of its servers and computers last month.

The government said it was not aware of any leak of sensitive information.

But the defence ministry has demanded MHI carry out a full investigation. Officials were angered after learning of the breach from local media reports.

Speaking at a news conference on Tuesday, Japan’s defence minister Yasuo Ichikawa said the cyber attackers had not succeeded in accessing any important information but MHI would be instructed “to undertake a review of their information control systems”.

“The ministry will continue to monitor the problem and conduct investigations if necessary,” Mr Ichikawa added.

All government contractors are obliged to inform ministers promptly of any breach of sensitive or classified information.


The Ministry of Defence has said the delay in Mitsubishi Heavy Industries informing it of the cyber attack is “regrettable” – a bland term regularly deployed by Japanese bureaucrats to describe everything from near indifference to utter outrage.

But it is clear there is concern in Japan about security at the country’s biggest defence contractor.

Mitsubishi Heavy makes everything from warships to missiles. The giant company says it discovered the breach in mid- August, and informed the Japanese police at the end of the month.

But the defence ministry was not told until Monday afternoon, after reports had appeared in local media.

The key issue is just how serious the attack was – and whether any of Japan’s defence secrets have leaked.

Mitsubishi Heavy says the virus was confined to just 45 servers and 38 computer terminals – out of the many thousands it operates.

An ongoing internal investigation has found only network information, such as IP addresses, has been compromised.

“It’s up to the defence ministry to decide whether or not the information is important. That is not for Mitsubishi Heavy to decide. A report should have been made,” a defence ministry spokesman was earlier quoted by Reuters as saying.

Better protection

The online attacks – which are believed to be the first of their kind against Japan’s defence industry – originated outside the company’s computer network, MHI said.

They have been described as spear phishing attacks – when hackers send highly customised and specifically targeted messages aimed at tricking people into visiting a fake webpage and giving away login details.

Neither the Japanese government nor MHI have said who may be responsible. A report in one Japanese newspaper said Chinese language script was detected in the attack against MHI.

But China rebuffed suggestions it could be behind the attacks.

“China is one of the main victims of hacking… Criticising China as being the source of hacking attacks not only is baseless, it is also not beneficial for promoting international co-operation for internet security,” foreign ministry spokesman Hong Lei said.

China has in the past been accused of carrying out online attacks on foreign government agencies and firms.

Beijing routinely denies that it is behind this kind of hacking but, says the BBC’s Defence Correspondent Jonathan Marcus, the US military is more and more concerned about China’s abilities in this field.

Fear of the “cyber-dragon” is driving forward a fundamental re-think of US policy which is coming more and more to regard computer hacking as a potential act of war, our correspondent adds.

MHI confirmed that 45 of its servers and 38 computers were infected by at least eight viruses.

The viruses targeted a shipyard in Nagasaki, where destroyers are built, and a facility in Kobe that manufactures submarines and parts for nuclear power stations, public broadcaster NHK reported.

A plant in Nagoya, where the company designs and builds guidance and propulsion systems for rockets and missiles, was also reportedly compromised.

MHI said it had consulted the Tokyo police department and was carrying out an investigation alongside security experts, which should be concluded by the end of the month.

Lockheed case

A second defence contractor, IHI, which supplies engine parts for military aircraft, said it had also been targeted.

IHI said it had been receiving emails containing viruses for months, but its security systems had prevented infection.

There are also reports that Japanese government websites, including the cabinet office and a video distribution service, have been hit by distributed denial-of-service attacks.

A typical DDoS attack involves hundreds or thousands of computers, under the control of hackers, bombarding an organisation’s website with so many hits that it collapses.

Last month, a Japanese defence white paper urged better protection against cyber attacks after US defence contractors were hit by a spate of assaults.

One of the most high-profile cases involved Lockheed Martin – the world’s biggest aerospace company, which makes F-16, F-22 and F-35 fighter jets as well as warships.

Although the firm said none of its programmes were compromised in the attack in May, it prompted other defence contractors to assess their own security measures.

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UBS $2 billion rogue trade suspect held in London

UBS $2 billion rogue trade suspect held in London | Reuters.

LONDON/ZURICH | Thu Sep 15, 2011 9:23am EDT

(Reuters) – Swiss bank UBS said a trader had lost it around $2 billion in unauthorized deals, and police in London arrested 31-year-old Kweku Adoboli in connection with the case.

Adoboli — a director of exchange traded funds and “Delta 1” working in the bank’s London office, according to his profile on networking site LinkedIn — was arrested on suspicion of fraud, sources told Reuters.

“I can confirm that an employee of the bank was arrested in London in connection with the statement,” a UBS spokesman said.

UBS said it might post a third-quarter loss after the rogue trades, a huge blow as it struggles to rebuild its credibility after years of crises.

The loss effectively cancels out the 2 billion-franc saving that the bank had hoped to make in a cost-cutting program announced last month in which it will axe 3,500 jobs.

It also threatens the future of UBS’s investment bank, which is being reviewed by chief executive Oswald Gruebel as part of a wide-ranging restructuring following heavy losses in the credit crisis and a damaging scandal over bankers helping rich U.S. clients dodge taxes.

UBS, which said no client positions were affected, is scheduled to hold an investor day on November 17 at which it was expected to announce major restructuring of the investment bank.

“The matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $2 billion,” the bank said in a statement.

UBS employed almost 18,000 people in its investment bank at the end of June, most of them outside Switzerland, particularly in London and the United States.

UBS shares were down 9.1 percent at 9.935 Swiss francs at 1320 GMT, while the European banking sector was up 4.78 percent.

“(This) is a staggering demonstration that all the clever systems that the banks now have, especially after the financial crisis, still cannot stop a determined individual getting round them if they want to,” said Chris Roebuck, Visiting Professor at Cass Business School in London.

“It will yet again confirm to the majority of shareholders who are Swiss that investment banking is not ‘proper’ banking, as private banking is.”

UBS had started to see client confidence return this year after it had to be rescued by the Swiss state in 2008 following massive losses on toxic assets held by its investment bank. The bank has had a history of major risk management glitches followed by repeated pledges to fix risk systems.


Any losses in its investment bank risk scaring UBS’s rich clients and prompting a further flight from its huge private bank, the core of its business that used to be the world’s biggest wealth manager but has slipped to third place.

“This loss has the scope to have a material impact on the perception of UBS’s private bank, impacting its future operating trends,” Goldman Sachs analysts Jernei Omahen and Peter Skoog said in a note.

“Today’s announcement therefore adds to the long list of arguments (and pressure) for a substantially smaller investment bank.”

UBS’s news caused disbelief among market operators.

The last similar case was when Jerome Kerviel, then a trader at Societe Generale, racked up a $6.7 billion loss in unauthorized deals revealed in 2008. Kerviel was sentenced to three years in prison in October 2010. [ID:nL5E7KF0M4]

Both Kerviel and Adoboli were the same age when the scandal broke and both worked with so-called Delta 1 products, derivatives which closely track the underlying securities and give the holder an easy way to gain exposure to several asset classes. Examples include equity swaps, forwards, futures and exchange-traded funds.

“It is amazing that this is still possible,” said ZKB trading analyst Claude Zehnder. “They obviously have a problem with risk management. Even when the amount isn’t so high, it is once more a loss of confidence that casts UBS in a poor light.”

“With this they are losing a lot of credit that they had regained with effort,” he added.

Switzerland’s financial markets regulator FINMA said it had been informed of the case and was in close contact with UBS.


The bank has in the past two years tried to rebuild the investment bank that nearly felled it during the financial crisis. It needed a state bailout after heavy losses on U.S. subprime mortgage-related securities.

Under Gruebel and investment bank boss Carsten Kengeter — themselves both once traders — it hired hundreds of traders in a bid to boost its bond business.

Several analysts said the incident made it more likely Kengeter would be in the firing line, while Gruebel could step down sooner rather than later.

“Gruebel saved the bank from destruction, so his main job is done. It is only a matter of time before he steps down. If it means he leaves a little sooner, it does not change a lot. But the investment bank is a bit of a disaster, and the knives will be out for Kengeter,” said Peter Thorne, analyst at Helvea.

Another analyst who declined to be named said: “Some important heads are going to have to roll, and some are saying that after a series of missteps with the IB, Kengeter himself will have to go.”

Former Bundesbank head Axel Weber is due to join the UBS board in May and take over as chairman in 2013.

The weak performance of the investment bank and tough capital rules in Switzerland had already attracted intense scrutiny over how UBS will cope, with analysts calling for a retrenchment of the investment bank.

The rogue trader scandal came as Swiss politicians were debating tough new capital rules designed to make sure big banks can weather future crises without having to be bailed out by the state.

“It shows that investment banking is a risky business and that it is important that systemically relevant functions are clearly separated from the rest of the banking business,” Caspar Baader, parliamentary leader of the right-wing Swiss People’s Party, told Swiss television.

($1 = 0.880 Swiss franc)

(Additional reporting by Andrew Thompson in Zurich, Sarah White, Steve Slater, Keith Weir, Stefano Ambrogi and Douwe Miedema in London; Writing by Sophie Walker; Editing by Will Waterman, Dan Lalor and Alexander Smith)

Global cyber-espionage operation uncovered

Global cyber-espionage operation uncovered | InSecurity Complex – CNET News.


Shady RAT intrusions in 2008

Shady RAT intrusions were rampant in 2008, the year of the Beijing Olympics. (Click image for a large, readable version.)

(Credit: McAfee)

A widespread cyber-espionage campaign stole government secrets, sensitive corporate documents, and other intellectual property for five years from more than 70 public and private organizations in 14 countries, according to the McAfee researcher who uncovered the effort.

The campaign, dubbed “Operation Shady RAT” (RAT stands for “remote access tool”) was discovered by Dmitri Alperovitch, vice president of threat research at the cyber-security firm McAfee. Vanity Fair‘s Michael Joseph Gross was first to write about the findings. The targets cut across industries, including government, defense, energy, electronics, media, real estate, agriculture, and construction. The governments hit include the U.S., Canada, South Korea, Vietnam, Taiwan, and India.

While most of the targets have removed the malware, the operation continues, according to McAfee. The company learned of the campaign in March while investigating a command-and-control operation it had discovered in 2009, but traced the activity back to 2006, Alperovitch said in a conference call. McAfee was able to gain control of the command-and-control server and monitor the activity.

Alperovitch said he had briefed senior White House officials, government agencies in the U.S. and other countries, and U.S. congressional staff. He also has notified the victims and is working with U.S. law enforcement agencies on the investigation, including shutting down the command-and-control server.

“We actually know of hundreds if not thousands of these servers also used by this actor,” he said in the conference call. “The entire economy is impacted by these intrusions. Every sector of the economy is effectively owned persistently and intellectual property is going out the door…It will have an impact on our jobs, the competitiveness of our industries, and on our overall economy.”


Related stories:
China linked to new breaches tied to RSA
U.S. military wants to ‘protect’ key civilian networks
Researchers warn of SCADA equipment discoverable via Google

Typically, a target would get compromised when an employee with necessary access to information received a targeted spear-phishing e-mail containing an exploit that would trigger a download of the implant malware when opened on an unpatched system. The malware would execute and initiate a backdoor communication channel to the command-and-control server, Alperovitch wrote in the report, which was posted to the McAfee blog.

“This would be followed by live intruders jumping on to the infected machine and proceeding to quickly escalate privileges and move laterally within the organization to establish new persistent footholds via additional compromised machines running implant malware, as well as targeting for quick exfiltration the key data they came for,” Alperovitch wrote.

“Having investigated intrusions such as Operation Aurora [which targeted Google and others] and Night Dragon (systemic long-term compromise of Western oil and gas industry), as well as numerous others that have not been disclosed publicly, I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact,” Alperovitch wrote. “In fact, I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

Unlike recent denial-of-service attacks and data breaches from groups like Anonymous and LulzSec (see chart of recent attacks), these espionage cases are more persistent, insidious, and threatening, and they cause much more harm, revealing important research and development information that can help countries better compete in markets, according to Alperovitch.


“I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

–Dmitri Alperovitch, VP, McAfee

“What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth — closely guarded national secrets (including from classified government networks), source code, bug databases, email archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, SCADA configurations, design schematics and much more has ‘fallen off the truck’ of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries,” he wrote.

“What is happening to all this data — by now reaching petabytes as a whole — is still largely an open question,” he continued. “However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth in a suddenly more competitive landscape and the loss of jobs in industries that lose out to unscrupulous competitors in another part of the world, not to mention the national security impact of the loss of sensitive intelligence or defense information.”

It’s unclear exactly who is behind the operation, but Alperovitch believes it is state-sponsored, although he declined to speculate which country might be responsible.

An educated guess might be China, given the targets. They include organizations in the U.S., most countries in Southeast Asia, but none in China, and many defense contractors. Also attacked were the United Nations, the World Anti-doping Agency, and the International Olympic Committee and Olympic committees in three countries, which were targeted right before and after the 2008 Olympic Games in Beijing, according to the report. China has disputed allegations that it has engaged in cyber espionage or attacks in the past.

“The presence of political non-profits, such as the private western organization focused on promotion of democracy around the globe or U.S. national security think tank is also quite illuminating,” Alperovitch wrote.

The report has a chart that lists all 72 targets; most are not named but are listed by type and country or location, along with country of origin, start date of the initial compromise, and duration of the intrusions. There is also a fascinating timeline that shows each intrusion and its duration by year.

Espionage goes on all the time, but it’s not often that details surface publicly. Several weeks ago security firm Invincea disclosed information about a spear-phishing campaign that was targeting the U.S. defense industry. In that case the e-mail purported to come from the U.S. Intelligence Advanced Research Projects Activity (IARPA) and used an Excel spreadsheet with defense contacts as bait, Invincea Chief Executive Anup Ghosh said in an interview today. More details are on the Invincea blog..

Researchers have to be careful in disclosing information about foreign cyber-espionage campaigns so they don’t compromise surveillance and investigations the U.S. government might be conducting related to those operations, Ghosh said.

“We couldn’t tie the operation to a nation-state, like McAfee did,” he said.

Updated August 3 at 6:30 a.m. PT with details from the McAfee report, at 9:58 a.m. PT with details from a conference call, and at 11:56 a.m. PT to clarify timing of McAfee investigation and include Invincea disclosing espionage campaign.

NATO site hacked

NATO site hacked • The Register.

Bookshop opened

Free whitepaper – Electrical Efficiency Measurement for Data Centers

NATO is warning subscribers to its e-Bookshop service that hackers have likely stolen its customer database.

The site is run as a separate service for distributing NATO information and does not contain any classified or secret information.

The bookshop has been closed and all members been warned by email to change their passwords if they are using them for other websites or services.

The email said: “Our examinations show a possible compromise of user information (username, password, address and email address) for people who have ordered publications from the e-Bookshop or subscribed to our email service.

“If you use the same email and password on other web platforms it is highly recommended that you change your passwords.”

NATO members were warned last month of increasing threats from hackivist group Anonymous. Looks like their advice was right.

The organisation is beginning to take cyber-threats more seriously – late last year it designated cyber-defence as a critical capability.

There is no clue so far as to who is behind the attack. The organisation has been hit before, and has no shortage of enemies.

Meanwhile LulzSec released a bunch of documents purloined from Arizona Police.

NATO’s data breach statement is here. ®