Krebsonsecurity Author Twice Honored

March 4, 2010
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There is perhaps no greater compliment than to have your most esteemed peers recommend your work.  I am now blogging from the RSA Conference in San Francisco, and over the past two days krebsonsecurity.com has received two peer recognition awards, one from the SANS Institute – among the nation’s top security research and training groups – and another from the Security Bloggers Network, an organization that has sought to recognize blogs that provide valuable content on computer security issues.

The SANS Institute polled 75 cybersecurity journalists and asked them to rank the top peers in their field. True to form, I showed up late to the awards ceremony on Tuesday, and Alan Paller, director of research for SANS, called me up on stage and said I’d received twice as many votes as the next guy in the contest, Robert McMillan, a reporter whose work is almost certainly the most widely syndicated and quoted of virtually anyone in this industry. Likewise, I am proud to have shared this honor with reporters whose work I recommend and admire, including USA Today’s Byron Acohido, Wired.com’s Kim Zetter, as well as Dan Goodin from The Register.

In related news, the delegates who were party to the Security Bloggers Awards at RSA this year picked krebsonsecurity.com as the top “non-technical security blog.” Somehow, I managed to show up late for this as well. Again, it was wonderful to have been nominated alongside security bloggers such as Taosecurity’s Richard Bejtlich, and security curmudgeon-in-chief Bruce Schneier.

Regulators Revisit E-Banking Security Guidelines

March 3, 2010
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Prodded by incessant reports of small- to mid-sized business losing millions of dollars at the hands of organized cyber criminals, federal regulators may soon outline more stringent steps that commercial banks need to take to protect business customers from online banking fraud and educate users about the risks of banking online.

At issue are the guidelines jointly issued in 2005 by five federal banking regulators under the umbrella of the Federal Financial Institutions Examination Council (FFIEC). The guidance was meant to prod banks to implement so-called “multifactor authentication” — essentially, to require customers to provide something else in addition to a user name and password when logging into their bank accounts online, such as the output from a security token.

The FFIEC didn’t specify exactly how the banks had to do this, and indeed it left it up to financial institutions to work out the most appropriate approach. However, many banks appear to have gravitated toward approaches that are relatively inexpensive, easy to defeat, and that may not strictly adhere to the guidance, such as forcing customers to periodically provide the answer to “challenge questions” as a prerequisite to logging in to their accounts online.

Unfortunately, as I have documented time and again, organized computer criminals are defeating these solutions with ease. Experts say part of the problem is that few of these solutions can protect customers whose systems are already infected with password-stealing malicious software. What’s more, few banks have put in place technology on their back-end systems to monitor customer transactions for anomalies that may indicate fraudulent activity, much in the way that the credit card industry sifts through data in real time and alerts the customer if a transaction or set of transactions radically deviate from that customer’s usual purchasing habits.

Last month, krebsonsecurity.com, interviewed Robert C. Drozdowski, a senior technology specialist with the Federal Deposit Insurance Corporation (FDIC). Drozdowski told me that the banking regulators recently convened a series of meetings with banks and security technology providers to figure out whether additional guidance would help banks do a better job of protecting their commercial customers. I asked him about the current state of these regulations and what we might expect from banking regulators in the months ahead on this issue. What follows is a portion of that discussion.

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MS: Be Careful With Those Function Keys

March 2, 2010
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Microsoft Corp. has a message for Windows 2000, XP and Server 2003 users: If you browse the Interwebs with Internet Explorer 6, 7, or 8, take care to ignore any prompts that ask you to hit the F1 key on your keyboard, as doing so may be unhealthful to your PC.

It turns out that there is a security flaw in the way these operating systems + browser versions process “Windows Help files” in such a way that is entirely unhelpful. That is, clicking on the F1 key when presented with a specially crafted pop-up box prompting you to do so could allow criminals to download and install malicious software to your computer.

Thankfully, most Windows users are more likely to locate the “any” key on their systems before they realize that the “Function 1” key is but the first of 12 such keys situated just above the left-to-right number keys on the standard Windows keyboard. Indeed, most Windows users’ first experience with these function keys is when something goes wrong with Windows.

In a security advisory issued Monday, Microsoft said it may at some point issue a software update to address this shortcoming. Redmond’s advisory on this topic is available here. The organization responsible for this warning — Polish security firm iSec Security Research — has a bit more information here on the ins and outs of this bug.

Talking Bots with Japan’s ‘Cyber Clean Center’

March 1, 2010
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I’ve grown fascinated over the years with various efforts by Internet service providers to crack down on the menace from botnets, large groupings of hacked PCs that computer criminals remotely control for a variety of purposes, from spamming to hosting malicious software and attacking others online. Indeed, the botnet problem has become such a global menace that entire countries are now developing anti-botnet programs in collaboration with domestic ISPs.

One of the more unique and long-running examples of this is Japan’s “Cyber Clean Center,” (referred to hereafter as CCC) a little-known effort by the Japanese Computer Emergency Response Team Coordination Center (JP-CERT) and a collection of 76 Japanese ISPs covering 90 percent of the nation’s Internet users.

Participating ISPs that have customers with botted PCs may send those users an e-mail — and in some cases a letter via postal mail — instructing them to visit the CCC’s Web site, and download and run a cleanup tool developed by the JP-CERT in coordination with Trend Micro, the dominant anti-virus and computer security firm in Japan.

Relatively few of the thousands of U.S.-based ISPs have such programs in place, or if they do then not many have been willing to discuss them publicly. Some notable exceptions are Cox, Comcast (which is rolling out a trial bot infection notification system), and Qwest (if I missed any other biggies, readers please set me straight).

It’s unfortunate that such programs aren’t more widely emulated, because a majority of the world’s bot problem begins and ends here in the United States.  According to a recent report (.pdf) by McAfee, the United States is home to the second largest pool of botted PCs — 2nd only to China — and is the world’s biggest exporter of junk e-mail.

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Microsoft Ambushes Waledac Botnet, Shutters Whistleblower Site

February 25, 2010
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Microsoft’s lawyers this week engineered a pair of important takedowns, one laudable and the other highly-charged. The software giant orchestrated a legal sneak attack against the Web servers controlling the Waledac botnet, a major distributor of junk e-mail. In an unrelated and more controversial move, Redmond convinced an ISP to shutter a popular whistleblower Web site for hosting a Microsoft surveillance compliance document.

On Feb. 22, a federal judge in Virginia granted a request quietly filed by Microsoft to disconnect 277 Internet domains believed to be responsible for directing the daily activities of the Waledac botnet, estimated to be one of the ten-largest spam botnets in existence today and responsible for sending 1.5 billion junk e-mails per day. Microsoft said it found that between December 3-21, 2009, approximately 651 million spam emails attributable to Waledac were directed to Hotmail accounts alone, including offers and scams related to online pharmacies, imitation goods, jobs, penny stocks and more.

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N.Y. Firm Faces Bankruptcy from $164,000 E-Banking Loss

February 24, 2010
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A New York marketing firm that as recently as two weeks ago was preparing to be acquired now is facing bankruptcy from a computer virus infection that cost the company more than $164,000.

Karen McCarthy, owner of Merrick, N.Y. based Little & King LLC, a small promotions company, discovered on Monday, Feb. 15 that her firm’s bank account had been emptied the previous Friday. McCarthy said she immediately called her bank – Cherry Hill, N.J. based TD Bank – and learned that between Feb. 10 and Feb. 12, unknown thieves had made five wire transfers out of the account to two individuals and two companies with whom the McCarthys had never had any prior business.

“She was told to go to the branch next day, and she did, and the people at the branch were very nice, apologetic, and said, ‘Whatever happened, we’ll replace it,’” Karen McCarthy’s husband Craig said. “She called them up on Wednesday, and they gave her the runaround. Then she finally got to talk to someone and they said ‘We don’t see the error on our side.’”

Immediately before the fraud occurred, Mrs. McCarthy found that her Windows PC would no longer boot, and that the computer complained it could not find vital operating system files. “She was using it one day and then this blue screen of death just came on her screen,” said a longtime friend who was helping McCarthy triage her computer.

Later, McCarthy’s friend would confirm that her system had been infected with the ZeuS Trojan, a potent family of malware that steals passwords and lets cyber thieves control the infected host from afar. ZeuS also includes a feature called “kill operating system,” which criminals have used in prior bank heists to effectively keep the victim offline and buy themselves time to make off with the cash.

Karen McCarthy said TDBank has dug in its heels and is now saying it has no responsibility for the loss.

“They feel that because [the thieves] compromised my computer that it’s my responsibility and that I should look into my insurance, but I don’t have insurance,” McCarthy said. “I had a company that was interested in purchasing us, but they’re not going to do that now.  I’m basically looking at bankruptcy, because I have very little money to operate on now.”

Krebsonsecurity spoke briefly with John G. McCluskey, vice president of TDBank’s corporate security and investigations. McCluskey referred all questions about the incident to the bank’s marketing department, which hasn’t returned calls seeking additional information and comment.

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IT Firm Loses $100,000 to Online Bank Fraud

February 23, 2010
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A New Hampshire-based IT consultancy lost nearly $100,000 this month after thieves broke into the company’s bank accounts with the help of 10 co-conspirators across the United States.

On Feb. 10, Hudson, N.H. based Cynxsure LLC received a voicemail message from its bank, Swift Financial, a Wilmington, Del. institution that focuses on offering financial services to small businesses. The message said to contact the bank to discuss an automated clearing house (ACH) payment batch that had been posted to Cynxsure’s account.

The next day, Cynxsure’s owner Keith Wolters returned the call and learned from Swift that someone had put through an unauthorized batch of ACH transfers totaling $96,419.30. The batch payment effectively added 10 new individuals to the company’s payroll, sending each slightly less than $10,000. None of the individuals had any prior business or association with Cynxsure.

Wolters said the bank told him it would try to reverse the transfers, and in the meantime it issued the company a provisional credit, replacing all of the stolen funds. But when he went to draw on that amount, Wolters found he was not able to withdraw money from the account. The next day, Wolters said, the bank reported that it had been unable to reverse the transactions. Shortly thereafter, he said, Swift withdrew the provisional credit.

Cynxsure’s attorney is now drawing up papers to sue the bank.

“We have done our best to make sure we’ve done everything we possibly can to protect our side of the equation,” Wolters said. “We’ve put a lot of time and effort into making sure something like this couldn’t have come from our side. We’re not going to be one of those companies that goes quietly into the night after something like this.”

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BLADE: Hacking Away at Drive-By Downloads

February 22, 2010
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The online version of Technology Review today carries a story I wrote about a government funded research group that is preparing to release a new free tool designed to block “drive-by downloads,” attacks in which the mere act of visiting a hacked or malicious Web site results in the installation of an unwanted program, usually without the visitor’s consent or knowledge.

The story delves into greater detail about the as yet unreleased software, called “BLADE,” (short for Block All Drive-By Download Exploits). That piece, which explores some of the unique approaches and limitations of this tool, is available at this link here.

As I note in the story, nearly all of the sites that foist these drive-by attacks have been retrofitted with what are known as “exploit packs,” or software kits designed to probe the visitor’s browser for known security vulnerabilities. Last month, I shared with readers a peek inside the Web administration panel for the Eleonore exploit pack — one of the most popular at the moment.

The BLADE research group has been running their virtual test machines through sites infected with Eleonore and a variety of other exploit packs, and their findings reinforce the point I was trying to make with that blog post: That attackers increasingly care less about the browser you’re using; rather, their attacks tend to focus on the outdated plugins you may have installed.

Phil Porras, program director for SRI International — one of the research groups involved in the project —  says that so far none of the exploit sites have been able to get past BLADE, which acts as a kind of sandbox for the browser that prevents bad stuff from being written to the hard drive. Yet, because the tool allows the exploit but blocks the installation of the malicious payload, the group has been able to collect a great deal of interesting stats about the attacks, such as which browsers were most often attacked, which browser plugins were most-targeted, and so on.

The following graphs were taken from the latest version of BLADE’s evaluation lab, which is constantly updated with results from new exploit sites. The charts below show the breakdown from 5,154 drive-by download infections blocked by BLADE.

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ZeuS: ‘A Virus Known as Botnet’

February 19, 2010
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As a journalist who for almost ten years has sought to explain complex computer security topics to a broad audience,  it’s sometimes difficult to be picky when major news publications over-hype an important security story or screw up tiny details: For one thing, Internet security so seldom receives more than surface treatment in the media that the increased attention to the issue often seems to excuse the breathlessness with which news organizations cover what may seem like breaking, exclusive stories.

The trouble with that line of thinking is that an over-hyped story tends to lack important context that helps frame the piece in ways that make it more relevant, timely, and actionable, as opposed to just sensational.

I say this because several major media outlets, including The Washington Post and the Wall Street Journal, on Thursday ran somewhat uncritical stories about a discovery by NetWitness, a security firm in Northern Virginia that has spent some time detailing the breadth of infections by a single botnet made up of PCs infected with ZeuS, a password stealing Trojan that lets criminals control the systems from afar. NetWitness found that this particular variant of the botnet, which it dubbed “Kneber,” had invaded more than 2,500 corporations and 75,000 computers worldwide.

The Post’s headline: More than 75,000 Computer Systems Hacked in one of the Largest Cyber Attacks, Security Firm Says.

From the WSJ: Broad New Hacking Attack Detected: Global Offensive Snagged Corporate, Personal Data at Nearly 2,500 Companies: Operation is Still Running.

Yahoo!’s coverage tells us, Scary Global Hacking Offensive Finally Outed.

After a day of dodging countless PR people pitching their experts to pile on to the story, I finally resolved to add my two cents when I heard this gem from the PBS Newshour with Jim Lehrer: “A major new case of computer hacking has been uncovered. A virus known as botnet invaded the computers and used them to steal data from commercial and government systems. Among other things, the hackers have gained access to e-mail systems and online banking.”

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Microsoft: Got Bluescreen? Check for Rootkits

February 18, 2010
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Microsoft confirmed today that the recent spate of Windows XP crashes and blue-screens experienced by people who installed this month’s batch of security updates were found mainly on systems that were already infected with a rootkit, a tool designed to hide malware infestations on host computers.

The folks at Redmond initially suspected rootkits may have played a part in the interminable reboot loops that many Windows users suffered from following February’s Patch Tuesday, but the company also said that it couldn’t rule out the possibility that third-party hardware and software conflicts might have also been to  blame. Today, Microsoft rejected the latter possibility, and said it had concluded that the reboot occurs because the system is infected with malware, specifically the Alureon Rootkit.

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