Massive Online Security Breach – Are You Reactive or Proactive?

by White & Case LLP

A few weeks ago, a Russian cyber gang amassed around 1.2 billion user name and password credentials belonging to more than 500 million email addresses. This may be to date the largest cache of stolen data.[1] The cyber gang accessed over 420,000 web and FTP sites to conduct a breach of this magnitude.[2]

In an era of increasing online connectivity, cybercrimes such as this are impacting businesses and individuals around the globe in a staggering manner. Far too often, companies take a reactive approach in dealing with information security and wait until an incident has occurred before addressing deficiencies or issues. Data breaches can result not only in monetary but also reputational damage, which can be difficult to remedy and often has a long term, lingering effect.

Given that hackers continue to innovate, businesses should constantly monitor and "pen" test their security policies and procedures and embrace a more robust approach to cyber security. For example, as a company invests in technologies such as mobile, social and cloud, it increases its cyber risk exposure. It needs to adopt strategies to mitigate the risks associated with these technologies.[3] Also, the role of information security in a company should be elevated and be the domain of an empowered leader reporting directly to a senior executive.[4] As a critical business issue, the title of this employee – chief security officer or security director – is not what is important. Rather, it is the ability of this leader to address security issues with the C-suite and assist the executive team to understand these critical issues. Information security deserves the full attention and understanding of the highest levels of a company.[5] With a proactive and comprehensive approach that involves strong leaders continually linking information security back to business strategy, executives will better position their organizations not only to avoid a cyber calamity but also to achieve commercial success.

As part of a broader security plan, some relatively quick and easy steps a company should consider to “harden” their online accounts are:

  • Modify passwords regularly. One relatively easy way to help curb damage is to mandate the changing of passwords on a regular basis. If using the same password across different accounts and websites, create different ones for each account, especially for those that may have sensitive information such as financial, health, social media and email accounts.
  • Use two-factor authentication where offered. Two-factor authentication may be one of the better ways to prevent accounts from getting hacked.[6] Employ two-factor authentication whenever possible to sign into accounts. This method adds an extra step to the standard login process and typically requires a user to enter a second password, which is usually then sent to that user’s mobile device (via text message or phone call).
  • Create unique and strong passwords. Avoid using simple or basic words, passwords that include the user’s name, and passwords that resemble previous ones used. Mandate that each password includes a variety of letters, numbers and symbols.
  • Do not allow web browsers to save passwords. Be sure not to allow web browsers to store and/or save passwords.
  • Consider using a password manager. There are a number of password managers available in the market, some of which are free of cost. Password managers typically require a user to only remember one master password while the software remembers all other login information.[7] Some managers also create unique and strong passwords. 

These recommendations are not foolproof, but should mitigate damage to online accounts in the event of a hack.

[1] - See You Have Been Hacked! (Aug. 5, 2014),
[2] - See id.
[3] - See Gary Loveland & Mark Lobel, Cybersecurity: The new business priority, PwC, (last visited Aug. 28, 2014).
[4] - See id.
[5] - See id.
[6] - See Whitson Gordon, Here's Everywhere You Should Enable Two-Factor Authentication Right Now, Lifehacker (Dec. 10, 2013, 4:00AM),
[7] - See Jason Parker, Take control of password chaos with these six password managers, CNET (Apr. 18, 2014, 5:51 PM),  (last updated Aug. 6, 2014, 4:00 PM).
[8] - See id.

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.

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