Sony Pictures: The Data Breach And How The Criminals Won

There are times when I’m simply gobsmacked at the nonsense that transpires in the course of a day. Today sadly, fear uncertainty and doubt won the day over common sense. There has been a lot of press generated about the Sony Sony Pictures breach. Make no mistake about it, this is as bad as I’ve ever seen publicly. Let’s start off with what we know, Sony Pictures had their digital pants yanked down around their ankles. Like I’ve said before, I really feel bad for the IT staff that have to recover from this fiasco. What we don’t actually know is, who was behind this attack. There has been plenty of rumour and conjecture but, lets face it, no hard evidence. Call me old fashioned but, I would love to see some facts.

One fact that has is unavoidable is that the Seth Rogen / James Franco movie, “The Interview” will not be available in theatres to watch on December 25th. Why? Well, an anonymous individual posted a threat on the site, That post has since been removed but, it was still available in Google Google cache of this writing. Here is the threat that was made,


We will clearly show it to you at the very time and places “The Interview” be shown, including the premiere, how bitter fate those who seek fun in terror should be doomed to.
Soon all the world will see what an awful movie Sony Pictures Entertainment has made.
The world will be full of fear.
Remember the 11th of September 2001.
We recommend you to keep yourself distant from the places at that time.
(If your house is nearby, you’d better leave.)
Whatever comes in the coming days is called by the greed of Sony Pictures Entertainment.
All the world will denounce the SONY.

On the heels of this threat being posted, no less than five theatre chains in the US and Canada backed out of showing the film. Those chains are Carmike Cinemas Carmike Cinemas, Cineplex, AMC Entertainment, Cinemark and Regal Entertainment. As frightening as that threat may seem on the face of it we have to get a grip. There is no way to validate this threat. We don’t know for certain that this was even made by the original “cyber” attackers.


However, following shortly after the news of the 5 large chains dropping the Seth Rogen / James Franco movie, Sony Pictures has decided to scrap the project entirely anyway. At this point it became a case of basic economics and liability. There is simply no money to made if the theatres won’t show the film. Plus the threat of violence coupled with the visual of another shooting like the one we saw at a Colorado theatre in 2012 ends in a fear of liability. It was time to pull the plug.

I have to throw a pail of (very) cold water on the idea that this was a threat that was based on North Korea being upset with the film. In the film, the ending apparently depicts a rather gruesome end to their current leader, Kim Jong-un. This has drawn out a very separate cinematic effort, the theatre of the bizarre. The fascination that this must be a state sponsored actor. There has been no hard evidence put forward. Remember that the attackers had made ransom demands initially. More of a criminal behaviour. The best that we’ve seen is a tenuous connection to a state actor in the language settings at compile time in the malware that was used. Also, my all time favourite, “unnamed sources” were quoted. You know those are nothing but credible, and yes I’m being sarcastic. If the DPRK was going to get upset about a movie I would have imagined that they would have been more upset about “Team America: World Police“. I just read that the upcoming Steve Carell project featuring North Korea has also been scrapped. Unless we can get some facts, I’m not willing to budge on this subject.

Even the US Department of Homeland Security has weighed in on this topic,

From ABC News:

The Department of Homeland Security said the threat is not backed up by any “credible intelligence,” but sources told ABC News that the Sony hack and matters tied to it are being investigated not just as a criminal cyber matter but as a national security matter by the nation’s law enforcement and intelligence agencies.

Emphasis added by yours truly. Ah, the search for evidence. A wise choice.

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Seattle-based attorneys suing Sony Pictures over data breach

Seattle-based attorneys are suing Sony Pictures because of the data breach.
Gretchen Cappio, a partner with Keller Rohrback, said Sony knew their security system was weak, because they have had a data breach before.
Her office is representing two clients, both are former Sony employees.  She said they and their families had their personal information, including Social Security numbers and medical records, put on the Internet by hackers.
They said Sony is liable.
“The question our lawsuit is asking is: ‘What was this information doing vulnerable on Sony’s network in the first place? Why did they have, for example, an employee’s data who hadn’t worked at Sony for 12 years?  Why was her most important data vulnerable on Sony’s system,’” Cappio said.

The lawsuit was filed in California federal court.  Despite only two clients named in the suit, the hackers released the information of about 47,000 current and former employees and their families.  Cappio said the result of the lawsuit could certainly have a broad impact.

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Did Regulator Cause a Data Breach?

Experts Debate How Customer Data Could be Lost in an Audit

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Did Regulator Cause a Data Breach?

A portable flash drive holding sensitive customer data was lost after it was handed over to a federal banking regulator as part of a recent examination. Now experts are left wondering: How could such an egregious breach happen?

See Also: Payments Security EMV: Join CEO Bob Carr of Heartland Payment Systems

Losing sensitive customer data as part of a regulatory audit is extremely rare, all agree, and likely could have been prevented if basic security procedures had been followed.

“Surely, the examiners should comply with the same types of restrictions the institutions they examine have to contend with to provide adequate security,” says Shirley Inscoe, a financial fraud expert and analyst for consultancy Aite.

Lost Data – What Happened?

On Oct. 30, California-based Palm Springs Federal Credit Union sent a letter to its members, informing them that a flash drive containing member names, addresses and Social Security numbers had been lost sometime around Oct. 20, after a routine audit by the National Credit Union Administration.

It is unclear exactly who – the credit union or the NCUA examiner/auditor – is responsible for the flash drive’s disappearance.

While Palm Springs FCU did not respond to Information Security Media Group’s request for comment. A copy of the institution’s notification was obtained and posted online this week by Credit Union Times.

“At this time we do not know if the external drive has been inadvertently destroyed or if it was acquired by an unauthorized person,” the credit union writes. “All we know is that it is lost.”

In its letter, Palm Springs FCU encourages its members to put fraud alerts on their credit reports as an identity-theft precaution.

The NCUA, in a subsequent statement to ISMG, says it is aware of the portable drive’s connection to the October audit, but does not address how the drive was lost. “NCUA confirms the loss of a thumb drive during an exam, which did not include passwords or PINs,” the NCUA states. “NCUA has received no indication of any unauthorized access to members’ accounts or attempts to gain improper access.”

The NCUA also says it is working closely with the Palm Springs FCU to investigate the drive’s disappearance.

“NCUA only confirmed the loss, not how it happened or who was responsible,” says NCUA spokesman John Fairbanks.

In the meantime, the NCUA and Palm Springs FCU are working to ensure they adequately notify all members who may have impacted.

“Since 2008, NCUA has had in place policies and procedures governing the proper handling of electronic data received as part of the examination process,” the NCUA points out. “These procedures require NCUA examiners at all times to properly secure and control electronic devices containing sensitive or confidential information. We take this situation very seriously and we are committed to ensuring that the data shared in exams are protected.”

‘Trust is at Stake’

Outside observers say the breach sheds a negative light on how some banking regulators and institutions manage data, and could have a devastating public relations impact.

“We are deeply concerned about this event,” says Eric Richard, general counsel for the Credit Union National Association. “NCUA examiners are charged with promoting the safety and soundness of credit unions, not putting it at risk. NCUA should conduct a thorough review of the situation to see what steps it can take to make sure that nothing like this happens again. Trust in the agency is at stake.”

And while sensitive customer information is often shared with banking regulators during audits and exams, enhanced precautions, such as the use of secure file transfer portals and data encryption, should be more commonly used to transmit that information, says Amy McHugh, an attorney and former IT examination analyst for the Federal Deposit Insurance Corp., who now works as a banking consultant for CliftonLarsonAllen.

“I know the FDIC has a secure document upload service with two-factor authentication to transmit information,” she says. “I’m not sure whether the NCUA has a similar process, and, if so, why it wasn’t used.”

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2014 Was the Year of the Data Breach, But 2015 Could Be Worse

2014: The year of the data breach. Although technically the trend started with the massive credit card heist at Target last holiday season, 2014 really saw the perfection of the art, with big hits at Home Depot, Sally Beauty, Michael’s, and yes, the celebrity iCloud photo leak. As bad as it’s been, 2015 will see no slowdown in incidents—but rather, will feature a few key evolutions in strategy and purpose on the part of criminals, as indicated by the latest high profile attack, on Sony Pictures.

The evolution of data breaches has already been notable given the sheer number of significant breaches effecting broad swaths of consumers and businesses around the world. Most of the impact has been limited to a hassle factor for consumers in that getting new payment cards and monitoring credit ratings are a must in the aftermath; for businesses, it’s a different story. Target lost several executives and brand identity points, and Sony has yet to assess the full extent of the intellectual property loss and the reputational damage stemming from the massive hack on its systems last month.

Financial institutions bear a significant cost for this as well.

“As we have documented in two surveys this year, data breaches at retailers have cost credit unions and their members a minimum of $90 million—and those are the costs only for breaches at Target, for $30 million, and Home Depot, at nearly $60 million,” said Credit Union National Association president and CEO Jim Nussle.

He added, “With the many other breaches that have also occurred—at Staples, Neiman-Marcus and others—certainly credit unions have incurred millions more in costs this year. In our most recent survey…credit unions told us that—to date—they have received no reimbursements for the Target breach, months after the breach occurred.”

But, there are signs that the damage will get much, much worse.

2015: Criminals Will Bide Their Time

As bad as things have been, there’s evidence that perpetrators are changing up their tactics to inflict deeper wounds going forward. Criminals are beginning to understand that knowledge may be the biggest currency—as evidenced by the swath of information stolen and leaked in the Sony hack.

In the Sony case, it’s believed that North Korea is behind the incident, in retaliation for the release of the comedy The Interview, which features Seth Rogan and James Franco as hapless journalists recruited by the CIA to assassinate North Korean leader Kim Jong-un. Pyongyang has called the film “an act of war.”

Sony chiefs Michael Lynton and Amy Pascal have said that the company was still examining the full extent of the attack, which resulted in the leaking of the script for the next Bond movie, full copies of upcoming movies like Fury and Annie, personal information on employees and other corporate data, and a slew of executive emails that have landed Pascal and others in hot water for making insensitive comments about everyone from President Obama to Angelina Jolie. The attack also wiped out data on a swath of its network.

“The subtlety and length of the breaches that are publicly disclosed indicate the underlying goals to be moving away from the ‘smash and grab’ of credit card number thefts towards more systemic damage possible by simply waiting for information and continuing to probe for more content,” said Steve Hultquist, chief evangelist at security analytics company RedSeal. “Similar to the miscreants who traded in secretly purloined celebrity photos long before the massive release, criminals are sitting inside networks gathering information to create a more significant payday or outcome.”

He predicts that attacks will become both more sophisticated and more subtle, and most will go undetected for months or may never be detected. And the longer a breach goes undetected, the more information the attackers gather that they can use for a variety of purposes even after the breach has been closed.

“The long-running breaches that we’ve seen in 2014 point towards even longer-running breaches with more subtle characteristics that are likely to result in more severe damage,” he said.

Attacks on Enterprises Ramp Up

Retail heists and Sony-style brand sabotage aside, Hultquist also believes that there will be at least one security situation that destroys a midsize or large organization—perhaps one that isn’t a household name.

“This past year saw a small company forced out of business when they refused to pay a ransom,” he said. “That approach of attacking will continue to grow, and very likely cause the demise of a larger organization.”

Espionage and destruction will become a greater percentage of motivation, adding to the risk that the attacks will be undetected, since the outcomes will be far more subtle. Attackers are becoming more focused on avoiding discovery, so it is very likely there will be long-running breaches that result in significant financial loss and other damage directed at objectives besides simple theft.

Consulting firm and industry think-tank Neohapsis takes that prediction one step further, and told us that its researchers believe that the line between attack and defense tools and techniques within large enterprises will blur, so that attackers and defenders will repurpose each other’s tools and techniques for their own benefit. And that could have very far-ranging consequences.

“Attackers will place themselves behind the same network defenses running on the target network to guarantee they evade detection,” the firm told us. “Anti-forensic techniques will help incident responders remain invisible to the attacker. Forensic tools will be used by attackers to steal passwords and locate valuable data. Host intrusion detection systems will alert hackers of suspicious administrators.”

In fact, sophisticated attacks may even repurpose legitimate security tools entirely, so that, say a centralized patch management system will distribute malicious code. Or, the local antivirus software could be hijacked and used to scan all processes for credit-cards and passwords.

Changes in Security Tactics?

One thing’s clear: in order to protect themselves, enterprises (retail organizations and otherwise) will need to radically overhaul their security strategies.

Many organizations have continued to focus on defensive strategies in the face of the data breach tidal wave. But this only increases their likelihood of breach. As Hultquist pointed out, instead of using analysis of potential access paths, for example, many organizations rely on detecting unexpected traffic as it traverses their networks. This provides much less time to address the attack than does automated audits of possible risk and access.

Going forward, “a growing number of organizations will add proactive strategies to their security arsenal, especially proactive analytics for attack prevention,” he said. “There will be some movement in this direction by more sophisticated organizations, helping to reduce their risk of attack.”

At the same time, some changes will be driven by a greater awareness on the part of the powers that be, and from legislation. Vijay Basani, CEO of EiQ Networks said that he believes that state attorneys general and the federal government will become more active advocates of consumer protection, taking steps to hold companies accountable for data breaches they suffer.

“With the Target data breach, we experienced a watershed event—we have seen several state and local agencies demanding information from the company regarding the data breach; and as a result we saw wholesale changes to top management including the CEO and CISO,” he said. “Retail-oriented attacks will continue…and we can expect additional large-scale breaches but also to see senior executives including Board members engaging in serious discussions about how to protect and insure themselves against class-action lawsuits from shareholders and customers.”

Edited by Maurice Nagle

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Sony Ex-Workers File Suits Against Company Over Data Breach

  • Sony
  • (Photo : Getty Images) Sony Pictures Entertainment has to face two new lawsuits from four former employees who claimed that the company did not do enough to prevent hackers from stealing personal information of current and former workers.

Sony Pictures Entertainment has to face two new lawsuits from four former employees who claimed that the company did not do enough to prevent hackers from stealing personal information of current and former workers.

Two employees sued the company in federal court, alleging that the company failed to secure its computer systems despite “weaknesses that it has known about for years.” The lawsuit further alleges that the latest data breaches are especially “surprising and egregious” because Sony Pictures has been repeatedly attacked over the years. In a hack three years ago, millions of user accounts on Sony’s PlayStation video-game network was compromised.

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Two other former movie production employees sued the company in Los Angeles Superior Court alleging that the company waited too long to notify employees that their data had been stolen. According to the lawsuit, Sony violated California Laws meant to protect sensitive financial and medical information.

“The repercussions of Sony’s failure to implement and maintain reasonable security practices and procedures will likely damage plaintiffs and class members for the rest of their lives,” the lawsuit stated, according to The Seattle Times.

“This is not a ‘bet your company’ lawsuit but it is a serious matter for Sony both in terms of dollar exposure and public perception of the brand,” said Jonathan Handel, an entertainment law professor at the University of Southern California Gould School of Law. “This doesn’t look good for Sony, which after all is a technology company.”

According to experts, these cases are just two of many that will be filed over the data breach against Sony. In addition to these lawsuits filed by employees, Sony might also face fines from government regulators, actors, directors who may never want to work for the studio again.

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Lessons Learned from Data Breaches [INFOGRAPHIC]

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Parking Databreach Hits Airports

Park ‘N Fly’s tagline—”More Than Just Parking”—was proven quite correct Tuesday (Dec. 16) when its customers were also given a large payment data breach, according to a report from Krebs On Security.

“Multiple financial institutions say they are seeing a pattern of fraud that indicates an online credit card breach has hit Park-n-Fly, an Atlanta-based offsite airport parking service that allows customers to reserve spots in advance of travel via an Internet-based reservation system,” the Krebs story noted. “The security incident, if confirmed, would be the latest in a string of card breaches involving compromised payment systems at parking services nationwide.”

The nature of the data grabbed would only support fraudulent online purchases, as it accessed insufficient data for full card cloning to make physical store purchases.

Krebs pointed out other recent parking breaches. “Last month, SP Plus — a Chicago-based parking facility provider — said payment systems at 17 parking garages in Chicago, Philadelphia and Seattle that were hacked to capture credit card data after thieves installed malware to access credit card data from a remote location. Card data stolen from those SP+ locations ended up for sale on a competing cybercrime store called Goodshop. In Missouri, the St. Louis Parking Company recently disclosed that it learned of breach involving card data stolen from its Union Station Parking facility between Oct. 6, 2014 and Oct. 31, 2014.”

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Ex-Sony Employees Sue Studio Over ‘Nightmare’ Data Breach

The massive hack of Sony Pictures
Entertainment Inc. (SNE)
’s computers has spurred two lawsuits by
former employees accusing the movie company of failing to
protect the personal information of thousands of workers.

Two ex-employees who sued yesterday called the breach “an
epic nightmare, much better suited to a cinematic thriller than
to real life.” Two others who sued today said Sony knew
retribution for “The Interview,” a comedy depicting a mission
to assassinate North Korean leader Kim Jong Un, was inevitable
and created an unreasonable risk for them.

Sony knew it had inadequate measures in place to protect
its data and suffered breaches twice before this year’s attack,
in which hackers got into the company’s computer systems and
released employee salaries, worker health data, racially tinged
e-mail banter and other sensitive information, according to the
complaint filed yesterday in Los Angeles federal court.

“Sony made a ‘business decision to accept the risk’ of
losses associated with being hacked,” according to the ex-workers, who seek to sue on behalf of about 15,000 current and
former employees whose data was compromised.

Representatives of Culver City, California-based Sony
Pictures didn’t immediately respond to phone and e-mail messages
seeking comment on the lawsuits.

Photographer: Frederic J. Brown/AFP/Getty Images

A vehicle exits the entryway to the Sony Pictures Entertainment Inc. headquarters in Los Angeles, California. Close

A vehicle exits the entryway to the Sony Pictures Entertainment Inc. headquarters in… Read More


Photographer: Frederic J. Brown/AFP/Getty Images

A vehicle exits the entryway to the Sony Pictures Entertainment Inc. headquarters in Los Angeles, California.

In the case filed today in state court in Los Angeles, the
two former employees allege that Sony executives were aware of
the risk of “The Interview” as early as May and the studio
created an unreasonable risk for its employees by going ahead
with the release.

“Sony knew it was reasonably foreseeable that producing a
script about North Korea’s leader Kim Jong Un would cause a
backlash,” according to their lawsuit.

Sony Warned

Sony Corp. (6758) was warned about a year ago that hackers had
infiltrated its network and were stealing gigabytes of data
several times a week, underscoring a pattern of lapses predating
the recent attack.

The hackers, who haven’t been identified, sifted in late
2013 through data from the company’s network, encrypted the
information to cover their tracks and mined it on a regular
schedule, said a person familiar with Sony’s investigation of
the breach, who asked not to be named because the findings are

The two former employees who sued yesterday, one a Virginia
resident who worked at Sony from to 2004 to 2007 and the other a
California woman who worked at Sony from 2000 to 2002, say they
have had to buy identity-theft protection and have spent as much
as 50 hours safeguarding themselves against any possible harm
from the stolen information.

They seek unspecified damages for negligence and violations
of California and Virginia state laws.

Tough Proof

In general, it’s hard for plaintiffs to prove harm from
stolen personal data when they haven’t become actual victims of
identity theft, said Jonathan Handel, who teaches entertainment
law at the University of Southern California. If actual identity
theft has occurred, the claims may not be suitable for a class
action like this one, he said.

“It’s a different type of financial harm if I can’t close
on buying a house because of identity theft than if I can’t buy
a bunch of Tiffany jewelry,” Handel said in a phone interview.

Sony Pictures said in a Dec. 8 letter to its employees,
filed with the California Attorney General’s Office, that the
hackers may have stolen Social Security, driver’s license and
passport numbers, as well as credit-card, compensation and
medical information, among other private data.

The studio said in the letter that it’s offering all
employees 12 months of identity protection services at no charge
through a third-party provider.

The cases are Corona v. Sony Pictures Entertainment Inc.,
14-09600, U.S. District Court, Central District of California
(Los Angeles) and Dukow v. Sony Pictures Entertainment Inc.,
BC566884, California Superior Court, Los Angeles County.

To contact the reporters on this story:
Karen Gullo in federal court in San Francisco at
[email protected];
Edvard Pettersson in federal court in Los Angeles at

[email protected]

To contact the editors responsible for this story:
Michael Hytha at
[email protected]
Peter Blumberg

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Sony faces 2nd class action suit over data breach

Carmike Cinemas pulls 'The Interview' with Sony's support

Carmike Cinemas pulls ‘The Interview’ with Sony’s support

FILE – This Dec. 2, 2014 file photo shows Sony Pictures Entertainment headquarters in Culver City, Calif. Two former employees of Sony Pictures Entertainment on Tuesday, Dec. 16, 2014 filed suit against the company for not preventing hackers from stealing nearly 50,000 social security numbers, salary details and other personal information from current and former workers. (AP Photo/Nick Ut, File)

Posted: Tuesday, December 16, 2014 6:24 pm

Updated: 7:16 am, Wed Dec 17, 2014.

Sony facing 2 suits by ex-workers over data breach

Associated Press |

NEW YORK (AP) — Sony Pictures Entertainment now faces two lawsuits from four former employees who claim the company did not do enough to prevent hackers from stealing nearly 50,000 social security numbers, salary details and other personal information from current and former workers.

The lawsuits seek to gain class-action status on behalf of those employees whose private data, including medical records, have been released by hackers in recent weeks.

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Tuesday, December 16, 2014 6:24 pm.

Updated: 7:16 am.

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UC Berkeley warns 1600 of personal data breach – KABC

UC Berkeley officials say that about 1,600 people may have had their Social Security or credit card numbers stolen by hackers who infiltrated campus servers and databases.

University spokeswoman Janet Gilmore says many of the individuals potentially affected by the data breach in the school’s real estate division are current or former UC Berkeley employees, while others had business ties to the division.

The break-in was discovered in September, but Gilmore says it took until the middle of November to determine what personal information the hacked servers stored and to track down addresses for those impacted.

The university started notifying people their information may have been compromised on Monday.

Gilmore says officials do not have any evidence the hackers downloaded or used the information.

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