A CTO’s Views On How To Combat Hackers & Cybercriminals

by Hodgson Russ LLP

In this article, I delve into the views and opinions of a chief technology officer of a telecommunications company to understand important steps a company can take to combat hackers and cyber-criminals. This interview provides a broad and general overview of the activities of hackers and cybercriminals, and the types of preventative measures a company should consider to thwart a data breach.

Question No.1

Alba Alessandro: What is the biggest misconception about hackers and cyber-criminals?

James Dechiaro: Probably that all hackers are cyber criminals. There are both the “good” guys and “bad” guys. A cybercriminal displays both malicious intent and no permission from the target to access its systems.

There are different classes of hackers. A “white hat” is also known as one of the “good guys” and is typically employed by a company in a preemptive measure to actively test systems in the hopes of discovering and correcting potential vulnerabilities before the bad guys are able to do any damage. It is the “black hat” hackers whom are known as “the bad guys” that act with either malicious intent or have some financial motivation to steal or harm a company, who are deemed cyber criminals. Typically, “black hat” hackers are known to sell sensitive data and may be found to have ties to organized crime. There are also the “grey hat” hackers that are not sitting on either side of the fence, and they hack basically for the love of the sport.

To the layman cyber criminals and hackers are one in the same . A cybercriminal is a hacker but the reverse does not necessarily apply—a hacker is not always a cybercriminal. “It’s the old adage that it takes a thief to protect you from a thief.”

Question No. 2

Alba Alessandro: What are some consequences other organizations have faced when they have failed to implement the right preventative measures?

James Dechiaro: First and foremost, costly litigation. The recent online retailers whose systems were hacked and the customers personal identity was stolen is a prime example. Firms today need to practice due care with respect to protecting customer data. Second, is loss of consumer confidence and business. And third, risk of financial ruin.

Question No. 3

Alba Alessandro: How do you minimize risk?

James Dechiaro: As the NSA advises, employ a “layered and in-depth defense approach.” If one mechanism fails, there is a back-up. For instance, Internet robots are constantly scanning companies Internet Protocol addresses for certain vulnerabilities. Once they identify the vulnerabilities, the hackers will try to exploit it. In this type of scenario, it’s hard to track hackers because they hide behind other compromised systems. For example, because the laws vary from country to country, it’s almost impossible to do forensics on the attacks that originate overseas.

Question No. 3

Alba Alessandro: What is some of the new technology available to combat threats?

James Dechiaro: Technology is always evolving to combat new threats, whenever possible firms should be up to date.

(1) Next Generation Firewalls. This is both an application and firewall. It is a firewall in the traditional sense but it also contains intrusion prevention and detection mechanisms using application signature based technology. Hackers create different applications to trick legacy firewalls to let them through. Because most firms realize not to let any traffic in from the outside, hackers have adopted by attacking from inside the network essentially bypassing these protections. Legacy firewalls are not well suited to cope with this type of attack vector. They can embed a virus in an email to infect a computer with remote access software and bypass firewall protection. Next Generation Firewalls can help in this regard since they know what the application signature is supposed to look like when the infected PC attempts to connect outside the corporate network.

(2) Multifactor Authentication. This is a process whereby a company has to have present in its system at least two or more authentication factors. The factors are: (a) knowledge—a password only the user or company knows; (b) possession—something only the user or company has; and (c) inherence— a password plus a biometrics or secure token. The drawback to this approach is that the more secure a system is, the less usable it becomes. Even though it’s harder for hackers to infiltrate the system, it involves more steps and increases difficulty for the end user.

(3) Data Encryption At Rest. The data that resides on the server has to be encrypted. In this way if the server is compromised, the data is not of any value

Even with the new technology, not “one size fits all” that encompasses complete protection. Rather, a sound security policy is the recommended approach. A security policy should consist of focused domains, such as: (a) access control (swipe card to building); (b) operational and physical security (only the people that need to work on the program have physical access and the infrastructure is locked). Finally, follow-up with a business continuity and a disaster recovery plan. Any plan must be both technology and policy driven.

Question No. 4

Alba Alessandro: In terms of New York state regulatory compliance, what should a company do to meet the requirements?

James Dechiaro: To my knowledge, there is no New York state regulatory body that has jurisdiction over IT security. Currently, firms are on their own in protecting against data breaches. Governor Cuomo has recently sent out questionnaires to insurance companies concerning security compliance, so it appears this oversight is coming.

Question No. 5

Alba Alessandro: Is there a bullet-proof method of making a system hacker-proof?

James Dechiaro: Unfortunately, the answer is no. There is a big misconception that there is a finish line to the race. A system that could be considered secure today could be found vulnerable tomorrow. A company will always be adapting to new threats. New threats are more “smart” devices in the market that are born with WIFI technology so the products become potential targets and used as attack tools. Today, home media centers—WIFI television and even smarter refrigerators—can be used in “attack vectors.” To this end, technology can be both a blessing and a curse.

Question No. 6

Alba Alessandro: What do you do to stay one-step ahead?

James Dechiaro: Keep current on emerging trends, including technology and political events. Comply with industry standards and best practices. Security is only as strong as the weakest link.

Question No. 7

Alba Alessandro: What are your thoughts on cyber liability insurance?

James Dechiaro: Cyber insurance is inevitable. Identification theft is a lucrative business for cybercriminals. A company mitigates its liability by buying insurance in other areas today, IT should not be any different. In some cases insurance will be more cost-effective than replacing outdated IT infrastructure that is too entrenched or not yet fully depreciated.

We thank James Dechiaro for his time and sharing with us his expertise in fending-off hackers and cyber-criminals.

The moral of this story is that a company is unable to completely avoid emergent cyber threats. Companies need sophisticated, technical, legal and insurance help to manage the significant risks posed by hackers or cybercriminals.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Hodgson Russ LLP | Attorney Advertising

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Hodgson Russ LLP

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