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JPMorgan’s Form 8-K to Investors: We’ve Been Hack-Mapped!

EW-blog_JPM-5DayChart_03OCT2014JPMorgan’s Form 8-K filed on Thursday with the Securities and Exchange Commission advises:

On October 2, 2014, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) updated information for its customers, on its Chase.com and JPMorganOnline websites and on the Chase and J.P. Morgan mobile applications, about the previously disclosed cyberattack against the Firm. The Firm disclosed that:

• User contact information – name, address, phone number and email address – and internal JPMorgan Chase information relating to such users have been compromised.

• The compromised data impacts approximately 76 million households and 7 million small businesses.

• However, there is no evidence that account information for such affected customers – account numbers, passwords, user IDs, dates of birth or Social Security numbers – was compromised during this attack.

• As of such date, the Firm continues not to have seen any unusual customer fraud related to this incident.

• JPMorgan Chase customers are not liable for unauthorized transactions on their account that they promptly alert the Firm to.

The Firm continues to vigilantly monitor the situation and is continuing to investigate the matter. In addition, the Firm is fully cooperating with government agencies in connection with their investigations.

According to ZDNet, a forensic security firm suggests the bank’s users’ accounts are now at greater risk of compromise and that password changes and two-factor authentication should be implemented to address the risk.

However, the 8-K’s wording indicates a different security risk altogether as the users’ passwords and Social Security numbers are not compromised.

The disclosure of information compromised combined with earlier reporting about the breach more closely matches a description of that collected by National Security Agency’s TREASURE MAP intelligence collection program. TREASURE MAP gathered information about networks including nodes, but not data created by users at the end nodes of the network. The application delineated the path to the ends. and physical ends, not merely virtual ends of the network. Read more

Information Monopoly Defines the Deep State

Monopoly_rutty-FlickrThe last decade witnessed the rise of deep state — an entity not clearly delineated that ultimately controls the military-industrial complex, establishing its own operational policy and practice outside the view of the public in order to maintain its control.

Citizens believe that the state is what they see, the evidence of their government at work. It’s the physical presence of their elected representatives, the functions of the executive office, the infrastructure that supports both the electoral process and the resulting machinery serving the public at the other end of the sausage factory of democracy. We the people put fodder in, we get altered fodder out — it looks like a democracy.

But deep state is not readily visible; it’s not elected, it persists beyond any elected official’s term of office. While a case could be made for other origins, it appears to be born of intelligence and security efforts organized under the Eisenhower administration in response to new global conditions after World War II. Its function may originally have been to sustain the United States of America through any threat or catastrophe, to insure the country’s continued existence.

Yet the deep state and its aims may no longer be in sync with the United States as the people believe their country to be — a democratic society. The democratically elected government does not appear to have control over its security apparatus. This machinery answers instead to the unseen deep state and serves its goals.

As citizens we believe the Department of State and the Department of Defense along with all their subset functions exist to conduct peaceful relations with other nation-states while protecting our own nation-state in the process. Activities like espionage for discrete intelligence gathering are as important as diplomatic negotiations to these ends. The legitimate use of military force is in the monopolistic control of both Departments of State and Defense, defining the existence of a state according to philosopher Max Weber.

The existing security apparatus, though, does not appear to function in this fashion. It refuses to answer questions put to it by our elected representatives when it doesn’t lie to them outright. It manages and manipulates the conditions under which it operates through implicit threats. The legitimacy of the military force it yields is questionable because it cannot be restrained by the country’s democratic processes and may subvert control over military functions.

Further, it appears to answer to some other entity altogether. Why does the security apparatus pursue the collection of all information, in spite of such activities disrupting the ability of both State and Defense Departments to operate effectively? Why does it take both individuals’ and businesses’ communications while breaching their systems, in direct contravention to the Constitution’s Fourth Amendment prohibition against illegal search and seizure? Read more

Stuxnet and the Poisons that Open Your Eyes

Poison_EUstdimage-Wikipedia_200px_mod2Playwright August Strindberg wrote, “…There are poisons that blind you, and poisons that open your eyes.

We’ve been blinded for decades by complacency and stupidity, as well as our trust. Most Americans still naively believe that our government acts responsibly and effectively as a whole (though not necessarily its individual parts).

By effectively, I mean Americans believed their government would not deliberately launch a military attack that could affect civilians — including Americans — as collateral damage. Such a toll would be minimized substantively. Yesterday’s celebration related to the P5+1 interim agreement regarding Iran’s nuclear development program will lull most Americans into deeper complacency. The existing system worked, right?

But U.S. cyber warfare to date proves otherwise. The government has chosen to deliberately poison the digital waters so that all are contaminated, far beyond the intended initial target.

There’s very little chance of escaping the poison, either. The ubiquity of U.S. standards in hardware and software technology has ensured this. The entire framework — the stack of computing and communications from network to user applications — has been affected.

• Network: Communications pathways have been tapped, either to obtain specific content, or obtain a mirror copy of all content traveling through it. It matters not whether telecom network, or internal enterprise networks.

• Security Layer: Gatekeeping encryption has been undermined by backdoors and weakened standards, as well as security certificates offering handshake validation
between systems.

• Operating Systems: Backdoors have been obtained, knowingly or unknowingly on the part of OS developers, using vulnerabilities and design flaws. Not even Linux can be trusted at this point (Linux progenitor Linus Torvalds has not been smart enough to offer a dead man’s switch notification.)

• User Applications: Malware has embedded itself in applications, knowingly or unknowingly on the part of app developers.

End-to-end, top-to-bottom and back again, everything digital has been touched in one layer of the framework or another, under the guise of defending us against terrorism and cyber warfare.

Further, the government watchdogs entrusted to prevent or repair damage have become part and parcel of the problem, in such a way that they cannot effectively be seen to defend the public’s interests, whether those of individual citizens or corporations. The National Institute of Standards and Technology has overseen the establishment and implementation of weak encryption standards for example; it has also taken testimony [PDF] from computing and communications framework hardware and software providers, in essence hearing where the continued weak spots will be for future compromise.

The fox is watching the hen house, in other words, asking for testimony pointing out the weakest patches installed on the hen house door.

The dispersion of cyber poison was restricted only in the most cursory fashion.

Stuxnet’s key target appears to have been Iran’s Natanz nuclear facility, aiming at its SCADA equipment, but it spread far beyond and into the private sector as disclosed by Chevron. The only protection against it is the specificity of its end target, rendering the rest of the malware injected but inert. It’s still out there.

Duqu, a “sibling” cyber weapon, was intended for widespread distribution, its aims two-fold. It delivered attack payload capability, but it also delivered espionage capability.

• Ditto for Flame, yet another “sibling” cyber weapon, likewise intended for widespread distribution, with attack payload and espionage capability.

There could be more than these, waiting yet to be discovered.

In the case of both Duqu and Flame, there is a command-and-control network of servers still in operation, still communicating with instances of these two malware cyber weapons. The servers’ locations are global — yet another indicator of the planners’/developers’ intention that these weapons be dispersed widely.

Poison everything, everywhere.

But our eyes are open now. We can see the poisoners fingerprints on the work they’ve done, and the work they intend to do. Read more

You Were Warned: Cybersecurity Expert Edition — Now with Space Stations

Over the last handful of days breathless reports may have crossed your media streams about Stuxnet infecting the International Space Station.

The reports were conflations or misinterpretations of cybersecurity expert Eugene Kaspersky’s recent comments before the Australian Press Club in Canberra. Here’s an excerpt from his remarks, which you can enjoy in full in the video embedded above:

[26:03] “…[government] departments which are responsible for the national security for national defense, they’re scared to death. They don’t know what to do. They do understand the scenarios. They do understand it is possible to shut down power plants, power grids, space stations. They don’t know what to do. Uh, departments which are responsible for offense, they see it as an opportunity. They don’t understand that in cyberspace, everything you do is [a] boomerang. It will get back to you.

[26:39] Stuxnet, which was, I don’t know, if you believe American media, it was written, it was developed by American and Israel secret services, Stuxnet, against Iran to damage Iranian nuclear program. How many computers, how many enterprises were hit by Stuxnet in the United States, do you know? I don’t know, but many.

Last year for example, Chevron, they agreed that they were badly infected by Stuxnet. A friend of mine, work in Russian nuclear power plant, once during this Stuxnet time, sent a message that their nuclear plant network, which is disconnected from the internet, in Russia there’s all that this [cutting gestures, garbled], so the man sent the message that their internal network is badly infected with Stuxnet.

[27:50] Unfortunately these people who are responsible for offensive technologies, they recognize cyber weapons as an opportunity. And a third category of the politicians of the government, they don’t care. So there are three types of people: scared to death, opportunity, don’t care.”

He didn’t actually say the ISS was infected with Stuxnet; he only suggested it’s possible Stuxnet could infect devices on board. Malware infection has happened before when a Russian astronaut brought an infected device used on WinXP machines with her to the station.

But the Chevron example is accurate, and we’ll have to take the anecdote about a Russian nuclear power plant as fact. We don’t know how many facilities here in the U.S. or abroad have been infected and negatively impacted as only Chevron to date has openly admitted exposure. It’s not a stretch to assume Stuxnet could exist in every manner of facility using SCADA equipment combined with Windows PCs; even the air-gapped Russian nuclear plant, cut off from the internet as Kaspersky indicates, was infected.

The only thing that may have kept Stuxnet from inflicting damage upon infection is the specificity of the encrypted payload contained in the versions released in order to take out Iran’s Natanz nuclear facility. Were the payload(s) injected with modified code to adapt to their host environs, there surely would have been more obvious enterprise disruptions.

In other words, Stuxnet remains a ticking time bomb threatening energy and manufacturing production at a minimum, and other systems like those of the ISS at worst case. Read more

The Stalker Outside Your Window: The NSA and a Belated Horror Story

[photo: Gwen's River City Images via Flickr]

[photo: Gwen’s River City Images via Flickr]

It’s a shame Halloween has already come and gone. The reaction to Monday’s Washington Post The Switch blogpost reminds of a particularly scary horror story, in which a young woman alone in a home receives vicious, threatening calls.

There’s a sense of security vested in the idea that the caller is outside the house and the woman is tucked safely in the bosom of her home. Phew, she’s safe; nothing to see here, move along…

In reality the caller is camped directly outside the woman’s window, watching every move she makes even as she assures herself that everything is fine.

After a tepid reaction to the initial reporting last week, most media and their audience took very little notice of the Washington Post’s followup piece — what a pity, as it was the singular voice confirming the threat sits immediately outside the window.

Your window, as it were, if you have an account with either Yahoo or Google and use their products. The National Security Agency has access to users’ content inside the corporate fenceline for each of these social media firms, greasy nose pressed to glass while peering in the users’ windows.

There’s more to story, one might suspect, which has yet to be reported. The disclosure that the NSA’s slides reflected Remote Procedure Calls (RPCs) unique to Google and Yahoo internal systems is only part of the picture, though this should be quite frightening as it is.

Access to proprietary RPCs means — at a minimum — that the NSA has:

1) Access to content and commands moving in and out of Google’s and Yahoo’s servers, between their own servers — the closest thing to actually being inside these corporations’ servers.

2) With these RPCs, the NSA has the ability to construct remote login access to the servers without the businesses’ awareness. RPCs by their nature require remote access login permissions.

3) Construction through reverse engineering of proprietary RPCs could be performed without any other governmental bodies’ awareness, assuming the committees responsible for oversight did not explicitly authorize access to and use of RPCs during engineering of the MUSCULAR/SERENDIPITY/MARINA and other related tapping/monitoring/collection applications.

4) All users’ login requests are a form of RPC — every single account holder’s login may have been gathered. This includes government employees and elected officials as well as journalists who may have alternate accounts in either Gmail or Yahoo mail that they use as a backup in case their primary government/business account fails, or in the case of journalists, as a backchannel for handling news tips. Read more

Angry Mom and First Principles: What is the Nature of a Broken Lock?

This won’t be a cool, calm, collected post like Marcy writes, because it’s me, the angry mom. You might even have seen me Tuesday afternoon in the school parking lot waiting to pick up a kid after sports practice. I was the one gripping the steering wheel too tightly while shouting, “BULLSHIT!” at the top of my lungs at the radio.

The cause? This quote by President Obama and the subsequent interpretation by NPR’s Ari Shapiro.

President Obama to ABC’s new Latino channel, Fusion (1:34): It’s important for us to make sure that as technology develops and expands and the capacity for intelligence gathering becomes a lot greater that we make sure that we’re doing things in the right way that are reflective of our values.

Ari Shapiro (1:46): And, Audie, I think what you’re hearing in that quote is a sense that is widespread in this administration that technological improvements have let the government do all kinds of things they weren’t able to do before. They tapped the German Chancellor’s personal cellphone and nobody really stopped to ask whether these are things they should be doing. And so that question, just because we can do something, well, does it mean we should be doing it, that’s the question that seems to be the focus of this review.

Bullshit, bullshit, bullshit.

Here, let me spell this out in terms a school-aged kid can understand.

photo, left: shannonpatrick17-Flickr; left, Homedit

This is a doorknob with a lock; so is the second closure device on the right.

The lock technology used on the second door is very different; it’s no longer simple analog but digitally enhanced. The second lock’s technology might be more complicated and difficult to understand. But it’s still a lock; its intrinsic purpose is to keep unauthorized persons out.

If one were to pick either lock in any way, with any tools to enter a home that is not theirs and for which they do not have permission to enter, they are breaking-and-entering.

If it’s law enforcement breaching that lock, they’d better have a damned search warrant or a court order, in the absence of a clear emergency or obvious crime in progress.

The argument that information technology has advanced to the point where the NSA blindly stumbles along without asking whether they should do what they are doing, or asking whether they are acting legally is bullshit. They have actively ignored or bypassed the proverbial lock on the door. It matters not where the lock is located, inside or outside the U.S.

The Washington Post’s revelation Wednesday that the NSA cracked Yahoo’s and Google’s SSLsecure sockets layer — is equivalent to evidence of deliberately busted door locks. So is the wholesale undermining of encryption systems on computers, cellphones, and network equipment revealed in reports last month, whether by weakened standards or by willfully placed holes integrated in hardware or software.

The NSA has quite simply broken into every consumer electronic device used for communications, and their attached networks. When the NSA was forced to do offer explanations for their actions, they fudged interpretations of the Constitution and laws in order to continue what they were doing. Their arguments defending their behavior sound a lot like a child’s reasoning. Read more

NSA and Compromised Encryption: The Sword Cuts Both Ways

[Snapshot, Ralph Langner presentation re: Stuxnet, outlining payload extraction (c. 2012 via YouTube)]

[Snapshot, Ralph Langner presentation re: Stuxnet, outlining payload extraction (c. 2012 via YouTube)]

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A friendly handshake is offered;
Names are swapped after entry;
The entrant delivers a present;
The present is unboxed with a secret key…

And * BOOM *

Payload delivered.

This is cyber weapon Stuxnet‘s operations sequence. At two points in the sequence its identity is masked — at the initial step, when identity is faked by a certificate, and at the third step, when the contents are revealed as something other than expected.

The toxic payload is encrypted and cannot be read until after the handshake, the name swap, and then decrypted when already deep inside the computer.

In the wake of the co-reported story on the National Security Agency’s efforts to crack computer and network encryption systems, the NSA claims they are only doing what they must to protect the country from terrorists, criminals, and cyber attacks generated by individuals, groups, and nation-state actors.

Defense, though, is but one side of the NSA’s sword; it has two lethal edges.

While use of encryption tools may prevent unauthorized access to communications, or allow malicious code to be blocked, the same tools can be used to obstruct legitimate users or shut down entire communications systems.

Encryption APIs (ex: Microsoft CryptoAPI embedded in Windows operating systems) are often used by higher level applications — for example, a random number generator within the API used to create unique keys for access can also be used to create random names or select random event outcomes like a roll of the dice.

In Stuxnet alone we have evidence of encryption-decryption used as cyber warfare, the application planned/written/supported in some way by our own government. This use was Pandora’s Box opened without real forethought to the long-term repercussions, including unintended consequences.

We know with certainty that the repercussions weren’t fully considered, given the idiocy with which members of Congress have bewailed leaks about Stuxnet, in spite of the fact the weapon uncloaked itself and pointed fingers in doing so.

One of the unconsidered/ignored/unintended consequences of using weaponry requiring encryption-decryption is that the blade can cut in the other direction.

Imagine someone within the intelligence community “detonating” a cyber weapon built in the very same fashion as Stuxnet.

A knock at the door with a handshake;
Door open, package shoved in, treated as expected goods;
Encrypted content decrypted.

And then every single desktop computer, laptop, netbook, tablet, and smartphone relying on the same standardized, industry-wide encryption tools “detonates,” obstructing all useful information activities from personal and business work to telecommunications. Read more

NSA’s PRISM and the Oddity of PalTalk

[graphic: GuardianUK (mod)]

[graphic: GuardianUK]

Remember this presentation slide on PRISM from last month’s blockbuster report by the Guardian-UK?

Remember the one outlier right smack in the middle of the slide — the company name most folks don’t recognize?

PalTalk.

Very few news outlets tackled PalTalk, explaining what the business is and asking why it was included in the program. There was little more than cursory digging; Foreign Policy looked into PalTalk’s background, while PCMag merely asked in a snarky piece why PalTalk instead of a myriad of other larger alternative social media platforms.

It’s still a good question, but the answer might be right in front of us with a little more analysis.

PalTalk is an “online video chat community,” according to its own description. This means it is in the same competitive space as AOL and Skype, as well as Microsoft’s Hotmail IM and Yahoo Messenger.

The slide we’ve seen doesn’t tell us if access to AOL, Microsoft, and Yahoo was limited to email only, however. We can’t be certain PRISM and the other programs referenced in this particular NSA presentation weren’t also permitted access to live chat environments hosted by these companies. Foreign Policy sidled up to the issue, mentioning Yahoo as well as PalTalk, but didn’t follow through. It’s been relatively easy to see how interest veered away from this question; many news outlets focused on email metadata, not chat.

Squirrel away the unasked, unanswered question(s) about chat someplace for future reference.

With regard to PalTalk, Foreign Policy noted the organization was singular among the companies cited in the NSA slide as it was not a Silicon Valley firm. PalTalk is based in New York. The line of inquiry here went no further.

Hello, New York? This small business is co-located in an AT&T facility in Manhattan, and in New Jersey according the firm’s CEO and founder Jeffrey Katz in a Forbes article dd. 2003 to which FP linked:

“…He rents space in two AT&T data centers, one in Manhattan, another in Secaucus, N.J., with $700,000 worth of computer equipment, including 80 lower-end servers from Dell Computer and five IBM Unix servers. …”

This should raise numerous questions at this point. Manhattan must be an extremely expensive place to run a data center, cheek-and-jowl with financial traffic demanding extremely high uptime. Because of the frequency with which New York was mentioned in published content about PalTalk, the New Jersey location is likely a redundant facility for the purposes of business continuity if the main facility is disrupted.

You’ll recall the last major disruptions to data traffic out of New York were due to Hurricane Sandy and 9/11.

Why would a tiny online video chat community need a data center likely to have world-class uptime and redundancy of a nature a company might need only twice a decade? Read more

The Shell Game: What is Microsoft Doing?

[graphic: Google Finance]

[graphic: Google Finance]

What is this so-called tech company doing?

Microsoft sees itself as going head-to-head with Apple and Google. The 10-year chart above comparing Microsoft, Apple, and Google stock tells us this has been a delusional perception.

It also sees itself in competition with IBM. Yet IBM surpassed it in market value two years ago, even after nearly a decade of ubiquity across personal computers in the U.S. and in much of the world. (IBM is included in that chart above, too.)

One might expect a sea change to improve performance, but is the shell game shuffling of Microsoft executives really designed to deliver results to the bottom line?

Tech and business sector folks are asking as well what is going on in Redmond; even the executive assignments seemed off-kilter. One keen analysis by former Microsoft employee Ben Thompson picked apart the company’s reorganization announcement last Thursday — coincidentally the same day the Guardian published a report that Microsoft had “collaborated closely” with the National Security Agency — noting that the restructuring doesn’t make sense.

The new organization pulls everything related to Windows 8 under a single leader, from desktop to mobile devices using the same operating system, migrating to a functional structure from a divisional structure. There are several flaws in this strategy Thompson notes, but a key problem is accountability.

To tech industry analysts, the new functional structure makes it difficult to follow a trail of failure in design and implementation for any single product under this functional umbrella.

To business analysts, the lack of accountability means outcomes of successful products hide failed products under the functional umbrella, diluting overall traceability of financial performance.

But something altogether different might be happening beneath the umbrella of Windows 8.

There’s only one product now, regardless of device — one ring to rule them all. It’s reasonable to expect that every single desktop, netbook, tablet, cellphone running on Windows 8 will now substantially be the same software.

Which means going forward there’s only one application they need to allow the NSA to access for a multitude of devices.

We’ve already learned from a Microsoft spokesman that the company informs the NSA about bugs or holes in its applications BEFORE it notifies the public.

It’s been reported for years about numerous backdoors and holes built intentionally and unintentionally into Microsoft’s operating systems, from Windows 98 forward, used by the NSA and other law enforcement entities.

Now Skype has likewise been compromised after Microsoft’s acquisition of the communications application and infrastructure for the purposes of gathering content and eavesdropping by the NSA, included in the PRISM program.

Given these backdoors, holes, and bugs, Microsoft’s Patch Tuesday — in addition to its product registration methodology requiring online validation of equipment — certainly look very different when one considers each opportunity Microsoft uses to reach out and touch business and private computers for security enhancements and product key validations.

Why shouldn’t anyone believe that the true purpose of Microsoft’s reorganization is to serve the NSA’s needs?

Tech magazine The Verge noted with the promotion of Terry Myerson to lead Windows — it’s said Myerson “crumples under the spotlight and is ungenerous with the press” — Microsoft doesn’t appear eager to answer questions about Windows.

As ComputerworldUK’s Glyn Moody asked with regard to collaboration with the NSA, “How can any company ever trust Microsoft again?”

If a company can’t trust them, why should the public?

The capper, existing outside Microsoft’s Windows 8 product: Xbox One’s Kinect feature is always on, in order to sense possible commands in the area where Kinect is installed.

ACLU’s senior policy analyst Chris Sogohian tweeted last Thursday, “… who in their right mind would trust an always-on Microsoft-controlled Xbox camera in their living room?”

One might wonder how often the question of trust will be raised before serious change is made with regard to Microsoft’s relationship with the NSA. With political strategist Mark Penn handling marketing for the corporation and Steve Ballmer still at the helm as CEO, don’t hold your breath.