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Former Equifax executive sent behind bars for insider trades, profiting on data breach

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Open source: Companies skipping security update face big risk
Vulnerabilities including the bug reportedly responsible for Equifax’s data breach are still common elements of open-source systems used in the enterprise.

A former Chief Information Officer (CIO) of Equifax has been issued a prison sentence for insider trading on the firm’s disastrous data breach before the incident became public knowledge. 

Jun Ying served as the CIO of the credit rating agency’s US Information Solutions arm at the time a 2017 data breach resulted in the exposure and theft of information belonging to roughly 145 million US citizens. 

Consumer data including names, Social Security numbers, dates of birth, home addresses, and partial driving license details were exposed. 

An Apache Struts vulnerability present in Equifax systems — despite a patch being made available two months prior — was blamed for the breach. 

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The data breach not only hammered the firm’s reputation but has also cost Equifax hundreds of millions of dollars in damage control, legal fees, and court battles, resulting in a cut Moody’s outlook from stable to negative in recent months. 

At the time of the incident, however, Ying appeared to only be concerned about protecting his own interests. 

After receiving a tip in his role as a CIO that a potential data breach had taken place, Ying began researching the potential impact the public disclosure of the cyberattack may have on the Equifax share price. 

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After examining how rival company Experian suffered after a 2015 data breach, two days after the discovery of the incident, Ying exercised his stock options and received a total of 6,815 shares. 

The 44-year-old executive then sold all of his stock, resulting in payment of over $950,000. According to US prosecutors, the insider trading benefited Ying to the tune of over $480,000 and circumvented a loss of over $117,000. 

Several weeks later, Equifax publicly admitted to the data breach and the firm’s share price plummeted. 

Ying pleaded guilty to insider trading and was sentenced to four months in prison with a year of supervised release. In addition, the former CIO was fined $55,000 and ordered to pay $117,117 in restitution.

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“Ying thought of his own financial gain before the millions of people exposed in this data breach even knew they were victims,” said US Attorney Byung Pak. “He abused the trust placed in him and the senior position he held to profit from inside information.” 

The executive is the second former Equifax employee to be charged after trying to cash in on the data breach. An ex-manager, Sudhakar Reddy Bonthu, pleaded guilty to insider trading in July following similar allegations of selling stock ahead of the breach’s public disclosure. 

Bonthu was sentenced to eight months of home confinement and was both fined $50,000 and ordered to forfeit $75,979. 

Previous and related coverage


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The Five Pillars of (Azure) Cloud-based Application Security

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This 1-hour webinar from GigaOm brings together experts in Azure cloud application migration and security, featuring GigaOm analyst Jon Collins and special guests from Fortinet, Director of Product Marketing for Public Cloud, Daniel Schrader, and Global Director of Public Cloud Architecture and Engineering, Aidan Walden.

These interesting times have accelerated the drive towards digital transformation, application rationalization, and migration to cloud-based architectures. Enterprise organizations are looking to increase efficiency, but without impacting performance or increasing risk, either from infrastructure resilience or end-user behaviors.

Success requires a combination of best practice and appropriate use of technology, depending on where the organization is on its cloud journey. Elements such as zero-trust access and security-driven networking need to be deployed in parallel with security-first operations, breach prevention and response.

If you are looking to migrate applications to the cloud and want to be sure your approach maximizes delivery whilst minimizing risk, this webinar is for you.

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Data Management and Secure Data Storage for the Enterprise

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This free 1-hour webinar from GigaOm Research brings together experts in data management and security, featuring GigaOm Analyst Enrico Signoretti and special guest from RackTop Systems, Jonathan Halstuch. The discussion will focus on data storage and how to protect data against cyberattacks.

Most of the recent news coverage and analysis of cyberattacks focus on hackers getting access and control of critical systems. Yet rarely is it mentioned that the most valuable asset for the organizations under attack is the data contained in these systems.

In this webinar, you will learn about the risks and costs of a poor data security management approach, and how to improve your data storage to prevent and mitigate the consequences of a compromised infrastructure.

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CISO Podcast: Talking Anti-Phishing Solutions

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Simon Gibson earlier this year published the report, “GigaOm Radar for Phishing Prevention and Detection,” which assessed more than a dozen security solutions focused on detecting and mitigating email-borne threats and vulnerabilities. As Gibson noted in his report, email remains a prime vector for attack, reflecting the strategic role it plays in corporate communications.

Earlier this week, Gibson’s report was a featured topic of discussions on David Spark’s popular CISO Security Vendor Relationship Podcast. In it, Spark interviewed a pair of chief information security officers—Mike Johnson, CISO for SalesForce, and James Dolph, CISO for Guidewire Software—to get their take on the role of anti-phishing solutions.

“I want to first give GigaOm some credit here for really pointing out the need to decide what to do with detections,” Johnson said when asked for his thoughts about selecting an anti-phishing tool. “I think a lot of companies charge into a solution for anti-phishing without thinking about what they are going to do when the thing triggers.”

As Johnson noted, the needs and vulnerabilities of a large organization aligned on Microsoft 365 are very different from those of a smaller outfit working with GSuite. A malicious Excel macro-laden file, for example, poses a credible threat to a Microsoft shop and therefore argues for a detonation solution to detect and neutralize malicious payloads before they can spread and morph. On the other hand, a smaller company is more exposed to business email compromise (BEC) attacks, since spending authority is often spread among many employees in these businesses.

Gibson’s radar report describes both in-line and out-of-band solutions, but Johnson said cloud-aligned infrastructures argue against traditional in-line schemes.

“If you put an in-line solution in front of [Microsoft] 365 or in front of GSuite, you are likely decreasing your reliability, because you’ve now introduced this single point of failure. Google and Microsoft have this massive amount of reliability that is built in,” Johnson said.

So how should IT decision makers go about selecting an anti-phishing solution? Dolph answered that question with a series of questions of his own:

“Does it nail the basics? Does it fit with the technologies we have in place? And then secondarily, is it reliable, is it tunable, is it manageable?” he asked. “Because it can add a lot overhead, especially if you have a small team if these tools are really disruptive to the email flow.”

Dolph concluded by noting that it’s important for solutions to provide insight that can help organizations target their protections, as well as support both training and awareness around threats. Finally, he urged organizations to consider how they can measure the effectiveness of solutions.

“I may look at other solutions in the future and how do I compare those solutions to the benchmark of what we have in place?”

Listen to the Podcast: CISO Podcast

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