Adobe, Microsoft Issue Critical Updates

April 10, 2012
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Adobe and Microsoft today each issued critical updates to plug security holes in their products. The patch batch from Microsoft fixes at least 11 flaws in Windows and Windows software. Adobe’s update tackles four vulnerabilities that are present in current versions of Adobe Acrobat and Reader.

Seven of the 11 bugs Microsoft fixed with today’s release earned its most serious “critical” rating, which Microsoft assigns to flaws that it believes attackers or malware could leverage to break into systems without any help from users. In its security bulletin summary for April 2012, Microsoft says it expects miscreants to quickly develop reliable exploits capable of leveraging at least four of the vulnerabilities. Continue reading →

FBI: Smart Meter Hacks Likely to Spread

April 9, 2012
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A series of hacks perpetrated against so-called “smart meter” installations over the past several years may have cost a single U.S. electric utility hundreds of millions of dollars annually, the FBI said in a cyber intelligence bulletin obtained by KrebsOnSecurity. The law enforcement agency said this is the first known report of criminals compromising the hi-tech meters, and that it expects this type of fraud to spread across the country as more utilities deploy smart grid technology.

Part of an FBI alert about smart meter hacks.

Smart meters are intended to improve efficiency, reliability, and allow the electric utility to charge different rates for electricity at different times of day. Smart grid technology also holds the promise of improving a utility’s ability to remotely read meters to determine electric usage.

But it appears that some of these meters are smarter than others in their ability to deter hackers and block unauthorized modifications. The FBI warns that insiders and individuals with only a moderate level of computer knowledge are likely able to compromise meters with low-cost tools and software readily available on the Internet.

Sometime in 2009, an electric utility in Puerto Rico asked the FBI to help it investigate widespread incidents of power thefts that it believed was related to its smart meter deployment. In May 2010, the bureau distributed an intelligence alert about its findings to select industry personnel and law enforcement officials.

Citing confidential sources, the FBI said it believes former employees of the meter manufacturer and employees of the utility were altering the meters in exchange for cash and training others to do so. “These individuals are charging $300 to $1,000 to reprogram residential meters, and about $3,000 to reprogram commercial meters,” the alert states.

The FBI believes that miscreants hacked into the smart meters using an optical converter device — such as an infrared light — connected to a laptop that allows the smart meter to communicate with the computer. After making that connection, the thieves changed the settings for recording power consumption using software that can be downloaded from the Internet.

“The optical converter used in this scheme can be obtained on the Internet for about $400,” the alert reads. “The optical port on each meter is intended to allow technicians to diagnose problems in the field. This method does not require removal, alteration, or disassembly of the meter, and leaves the meter physically intact.”

The bureau also said another method of attacking the meters involves placing a strong magnet on the devices, which causes it to stop measuring usage, while still providing electricity to the customer.

“This method is being used by some customers to disable the meter at night when air-conditioning units are operational. The magnets are removed during working hours when the customer is not home, and the meter might be inspected by a technician from the power company.”

“Each method causes the smart meter to report less than the actual amount of electricity used.  The altered meter typically reduces a customer’s bill by 50 percent to 75 percent.  Because the meter continues to report electricity usage, it appears be operating normally.  Since the meter is read remotely, detection of the  fraud is very difficult.  A spot check of meters conducted by the utility found that approximately 10 percent of meters had been altered.”

“The FBI assesses with medium confidence that as Smart Grid use continues to spread throughout the country, this type of fraud will also spread because of the ease of intrusion and the economic benefit to both the hacker and the electric customer,” the agency said in its bulletin.

The feds estimate that the Puerto Rican utility’s losses from the smart meter fraud could reach $400 million annually. The FBI didn’t say which meter technology or utility was affected, but the only power company in Puerto Rico with anywhere near that volume of business is the publicly-owned Puerto Rican Electric Power Authority (PREPA). The company did not respond to requests for comment on this story.

Continue reading →

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Urgent Fix for Zero-Day Mac Java Flaw

April 4, 2012
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Apple on Monday released a critical update to its version of Java for Mac OS X that plugs at least a dozen security holes in the program. More importantly, the patch mends a flaw that attackers have recently pounced on to broadly deploy malicious software, both on Windows and Mac systems.

Distribution of 550,000 Flashback-infected Macs. Source: Dr.Web.com

The update, Java for OS X Lion 2012-001 and Java for Mac OS X 10.6 Update 7, sews up an extremely serious security vulnerability (CVE-2012-0507) that miscreants recently rolled into automated exploit kits designed to deploy malware to Windows users. But in the past few days, information has surfaced to suggest that the same flaw has been used with great success by the Flashback Trojan to infect large numbers of Mac computers with malware.

The revelations come from Russian security firm Dr.Web, which reports that the Flashback Trojan has successfully infected more than 550,000 Macs, most which it said were U.S. based systems (hat tip to Adrian Sanabria). Dr.Web’s post is available in its Google translated version here.

Continue reading →

Gateline.net Was Key Rogue Pharma Processor

April 3, 2012
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It was mid November 2011. I was shivering on the upper deck of an aging cruise ship docked at the harbor in downtown Rotterdam. Inside, a big-band was jamming at a reception for attendees of the GovCert cybersecurity conference, where I had delivered a presentation earlier that day on a long-running turf war between two of the largest sponsors of spam.

Promenade of SS Rotterdam. Copyright: Peter Jaspers

The evening was bracingly frigid and blustery, and I was waiting there to be introduced to investigators from the Russian Federal Security Service (FSB). Several FSB agents who attended the conference told our Dutch hosts that they wanted to meet me, but in a private setting. Stepping out into the night air, a woman from the conference approached, formally presented the three men behind her, and then hurried back inside to the warmth of the reception.

A middle-aged stocky fellow introduced as the senior FSB officer spoke in Russian, while a younger gentleman translated into English. They asked did I know anything about a company in Moscow called “Onelia“? I said no, asked them to spell it for me, and inquired as to why they were interested in this firm. The top FSB official said they believed the company was heavily involved in processing payments for a variety of organized cyber criminal enterprises.

Later that evening, back at my hotel room, I searched online for details about the company, but came up dry. I considered asking some of my best sources in Russia what they knew about Onelia. But a voice inside my head warned that the FSB agents may have been hoping I’d do just that, and that they would then be able to divine who my sources were when those individuals began making inquiries about a mysterious (and probably fictitious) firm called Onelia.

My paranoia got the best of me, and I shelved the information. That is, until just the other day, when I discovered that Onelia (turns out it is more commonly spelled Oneliya) was the name of the limited liability company behind Gateline.net, the credit card processor that processed tens of thousands of customer transactions for SpamIt and Rx-Promotion. These two programs, the subject of my Pharma Wars series, paid millions of dollars to the most notorious spammers on the planet, hiring them to blast junk email advertising thousands of rogue Internet pharmacies over a four-year period.

WHO IS ‘SHAMAN’?

Gateline.net states that the company’s services are used by firms across a variety of industries, including those in tourism, airline tickets, mobile phones, and virtual currencies. But according to payment and affiliate records leaked from both SpamIt and Rx-Promotion, Gateline also was used to process a majority of the rogue pharmacy site purchases that were promoted by spammers working for the two programs. Continue reading →

Global Payments: Rumor and Innuendo

April 2, 2012
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Global Payments Inc., the Atlanta-based credit and debit card processor that recently announced a breach that exposed fewer than 1.5 million card accounts, held a conference call this morning to discuss the incident. Unfortunately, that call created more questions than it did answers, at least for me. The purpose of this post is to provide some information that I have gathered, and a few observations about the reporting on this breach so far.

In a conference call this morning, Paul Garcia, Chairman and CEO of Global Payments (NYSE: GPN), declined to offer few new details about how the breach happened, beyond the details the company released in its press release last night. He also declined to comment on reports that the breach may have dated back to at least January 2012. Garcia emphasized that the company self-reported and discovered the intrusion in early March, and proactively notified law enforcement officials and hired independent forensics investigators.

When asked about the timeline first reported by KrebsOnSecurity.com last Friday — that Visa and MasterCard were warning of a payment processor that had an exposure between Jan 21, 2012 and Feb. 25, 2012 — Garcia said, without elaborating:

“There’s a lot of rumor and innuendo out there which is not helpful to anyone, and most of it incredibly inaccurate. In terms of other timelines, I just cannot be specific further about that.”

He went on to state that, “This does not involve our merchants, our sales partners, or their relationships with their customers. Neither merchant systems, or point of sale devices, were involved in any way. This was self-discovered and self-reported.” Databreaches.net has a decent round-up of the call details, as well as other reporting on this breach. A recording of the conference call is available here.

I’d like to share a few thoughts on my own reporting as it relates to this breach. First, when I published the story early last Friday morning that is widely credited as the first to break the news of a large processor breach, at that time I did not know for sure that Global Payments had been compromised. I’d heard it from one source, but could not get it from a second source. The old-school reporter in me held back those details from my story.

Several readers have called me irresponsible for quoting anonymous sources stating that the Global Payments breach may have affected more than 10 million cards. This is simply not true. I didn’t even mention Global Payments in my original piece. That information was dug up by reporters at The Wall Street Journal. Indeed, given GPN’s statements thus far, I continue to be nagged by the possibility that my initial reporting may have been related to a separate, as-yet undisclosed breach at another processor. I mentioned this to a reporter at ABC News today, who included my perspective in a story here.

RUMOR AND INNUENDO

GPN said it would allow an hour for the call and for questions, but it told callers at the beginning of the conference that it would be using a portion of the call time to talk about its 4th quarter earnings. Although I sat in on the GPN call this morning for the entire hour and waited in the queue to ask questions, I was not afforded the opportunity. Nor did I hear questions allowed from reporters at mainstream news media outlets cited in this story. The company has not yet responded to my questions, which I submitted in a phone call after the news conference.

What follows is a partial brain dump on some of the information and interesting tidbits I’ve been able to uncover in my reporting today, in no particular order. Some or all of them may turn out to be relevant to the Global Payments breach, to a separate incident, or not at all. Continue reading →

Global Payments: 1.5MM Cards ‘Exported’

April 2, 2012
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Visa Drops Support for Breached Processor, Acknowledges Weekend Outage

Global Payments, the credit and debit card processor that disclosed a breach of its systems late Friday, said in a statement Sunday that the incident involved at least 1.5 million accounts. The news comes hours ahead of a planned conference call with investors, and after Visa said it had pulled its seal of approval for the company.

CNN Money charts Global Payments's stock dive on Friday.

In a press release issued 9:30 p.m. ET Sunday, Atlanta based Global Payments Inc. said it believes “the affected portion of its processing system is confined to North America and less than 1,500,000 card numbers may have been exported…Based on the forensic analysis to date, network monitoring and additional security measures, the company believes that this incident is contained. ”

It remains unclear whether there are additional accounts beyond these 1.5 million that were exposed by the breach; the company’s statement seems to be focusing on the number of cards it can confirm that thieves offloaded from its systems.

It’s also unclear how Global Payments’ timeline of the incident meshes with that of MasterCard and Visa. In an alert sent to card-issuing banks that was first reported early Friday by KrebsOnSecurity.com, the card associations said the window of vulnerability for the breached processor (at that time unnamed) was between Jan. 21, 2012 and Feb. 25, 2012. The alert also said that full Track 1 and Track 2 data was exposed, meaning thieves could use the stolen information to counterfeit new cards.

Yet, in a statement Friday, Global Payments said its own security systems identified and self-reported the breach, which it said was detected in early March 2012: “It is reassuring that our security processes detected an intrusion,” the company said. Continue reading →

MasterCard, VISA Warn of Processor Breach

March 30, 2012
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VISA and MasterCard are alerting banks across the country about a recent major breach at a U.S.-based credit card processor. Sources in the financial sector are calling the breach “massive,” and say it may involve more than 10 million compromised card numbers.

Update, 4:32 p.m. ET: Atlanta-based processor Global Payments just confirmed that they discovered a breach in early March 2012. See their full statement and several other updates at the end of this story.

Original post:

In separate non-public alerts sent late last week, VISA and MasterCard began warning banks about specific cards that may have been compromised. The card associations stated that the breached credit card processor was compromised between Jan. 21, 2012 and Feb. 25, 2012. The alerts also said that full Track 1 and Track 2 data was taken – meaning that the information could be used to counterfeit new cards.

Neither VISA nor MasterCard have said which U.S.-based processor was the source of the breach. But affected banks are now starting to analyze transaction data on the compromised cards, in hopes of finding a common point of purchase. Sources at two different major financial institutions said the transactions that most of the cards they analyzed seem to have in common are that they were used in parking garages in and around the New York City area. Continue reading →

Critical Security Update for Adobe Flash Player

March 28, 2012
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Adobe has issued a security update for its Flash Player software that fixes at least two critical vulnerabilities in the widely-used program. At long last, this latest version also includes an auto-updating mechanism designed to streamline the deployment of Flash security fixes across multiple browsers.

If it seems like you just updated Flash to fix security holes, it’s not your imagination. This is the third security update for Flash in the last six weeks. Flash Player v. 11.2 addresses a couple of flaws  in Adobe Flash Player 11.1.102.63 and earlier versions for Windows, Macintosh, Linux and Solaris, and Adobe Flash Player 11.1.111.7 and earlier versions for Android 3.x and 2.x. Adobe warns that these vulnerabilities could cause a crash and potentially allow an attacker to take control of the affected system.

My previous posts on Flash updates have been accompanied by lengthy instructions about how to update the program. That’s in part because Adobe has traditionally deployed two separate installers for Windows based systems: One for Flash on Internet Explorer, and another for non-IE browsers. With the release of Flash Player 11.2, Adobe is introducing a new background update mechanism for Windows users that promises to take some of the pain out of updating. Continue reading →

Researchers Clobber Khelios Spam Botnet

March 28, 2012
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Experts from across the security industry collaborated this week to quarantine more than 110,000 Microsoft Windows PCs that were infected with the Khelios worm, a contagion that forces infected PCs to blast out junk email advertising rogue Internet pharmacies.

Most botnets are relatively fragile: If security experts or law enforcement agencies seize the Internet servers used to control the zombie network, the crime machine eventually implodes. But Khelios (a.k.a. “Kelihos”) was built to withstand such attacks, employing a peer-to-peer structure not unlike that used by popular music and file-sharing sites to avoid takedown by the entertainment industry.

Update, 11:07 a.m. ET: Multiple sources are now reporting that within hours of the Khelios.B takedown, Khelios.C was compiled and launched. It appears to be spreading via Facebook.

Original post: The distributed nature of a P2P botnet allows the botmaster to orchestrate its activities by seeding a few machines in the network with encrypted instructions. Those systems then act as a catalyst, relaying the commands from one infected machine to another in rapid succession.

P2P botnets can be extremely resilient, but they typically posses a central weakness: They are only as strong as the encryption that scrambles the directives that the botmaster sends to infected machines. In other words,  anyone who manages to decipher the computer language needed to talk to the compromised systems can send them new instructions, such as commands to connect to a control server that is beyond the reach of the miscreant(s) who constructed the botnet.

That’s precisely the approach that security researchers used to seize control of Khelios. The caper was pulled off by a motley band of security experts from the Honeynet Project, Kaspersky, SecureWorks, and startup security firm CrowdStrike. The group figured out how to crack the encryption used to control systems infected with Khelios, and then sent a handful of machines new instructions to connect to a Web server that the researchers controlled.

That feat allowed the research team to wrest the botnet from the miscreants who created it, said Adam Meyers, director of intelligence for CrowdStrike. The hijacking of the botnet took only a few minutes, and when it was complete, the team had more than 110,000 PCs reporting to its surrogate control server.

“Once we injected that information in the P2P node, it was essentially propagating everything else for us,” Meyers said. “By taking advantage of the intricacies of the protocol, we were providing the most up-to-date information that all of hosts were spreading.”

The group is now working to notify ISPs where the infected hosts reside, in hopes of cleaning up the bot infestations. Meyers said that, for some unknown reason, the largest single geographic grouping of Khelios-infected systems – 25 percent — were located in Poland. U.S.-based ISPs were home to the second largest contingent of Khelios bots. Meyers said about 80 percent of the Khelios-infected systems they sinkholed were running Windows XP, an increasingly insecure operating system that Microsoft released more than a decade ago. Continue reading →

New Java Attack Rolled into Exploit Packs

March 27, 2012
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If your computer is running Java and you have not updated to the latest version, you may be asking for trouble: A powerful exploit that takes advantage of a newly-disclosed security hole in Java has been rolled into automated exploit kits and is rapidly increasing the success rates of these tools in attacking vulnerable Internet users.

The exploit targets a bug in Java (CVE-20120-0507) that effectively allows the bypassing of Java’s sandbox, a mechanism built into the ubiquitous software that is designed partly to blunt attacks from malicious code. Microsoft’s Malware Protection Center warned last week that new malware samples were surfacing which proved highly effective at exploiting the flaw. Microsoft says the samples it saw loaded the ZeuS Trojan, but thieves can use such attacks to install malware of their choosing.

According to posts on several underground carding forums, the exploit has now been automatically rolled out to miscreants armed with BlackHole, by far the most widely used exploit pack. An exploit pack is a software toolkit that gets injected into hacked or malicious sites, allowing the attacker to foist a kitchen sink full of browser exploits on visitors. Those visiting such sites with outdated browser plugins may have malware silently installed, and Java is almost universally the most successful method of compromise across all exploit kits.

According to software giant Oracle, Java is deployed across more than 3 billion systems worldwide. But the truth is that many people who have this powerful program installed simply do not need it, or only need it for very specific uses. I’ve repeatedly encouraged readers to uninstall this program, not only because of the constant updating it requires, but also because there seem to be a never-ending supply of new exploits available for recently-patched or undocumented vulnerabilities in the program.

Case in point: On at least two Underweb forums where I regularly lurk, there are discussions among several core members about the sale and availability of an exploit for an as-yet unpatched critical flaw in Java. I have not seen firsthand evidence that proves this 0day exploit exists, but it appears that money is changing hands for said code. Continue reading →