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Schneier on Security



A blog covering security and security technology.



Updated: 2018-01-19T12:06:34Z

 



Security Breaches Don't Affect Stock Price

2018-01-19T12:06:34Z

Interesting research: "Long-term market implications of data breaches, not," by Russell Lange and Eric W. Burger. Abstract: This report assesses the impact disclosure of data breaches has on the total returns and volatility of the affected companies' stock, with a focus on the results relative to the performance of the firms' peer industries, as represented through selected indices rather than...

Interesting research: "Long-term market implications of data breaches, not," by Russell Lange and Eric W. Burger.

Abstract: This report assesses the impact disclosure of data breaches has on the total returns and volatility of the affected companies' stock, with a focus on the results relative to the performance of the firms' peer industries, as represented through selected indices rather than the market as a whole. Financial performance is considered over a range of dates from 3 days post-breach through 6 months post-breach, in order to provide a longer-term perspective on the impact of the breach announcement.

Key findings:

  • While the difference in stock price between the sampled breached companies and their peers was negative (1.13%) in the first 3 days following announcement of a breach, by the 14th day the return difference had rebounded to + 0.05%, and on average remained positive through the period assessed.

  • For the differences in the breached companies' betas and the beta of their peer sets, the differences in the means of 8 months pre-breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.

  • For the differences in the breached companies' beta correlations against the peer indices pre- and post-breach, the difference in the means of the rolling 60 day correlation 8 months pre- breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.

  • In regression analysis, use of the number of accessed records, date, data sensitivity, and malicious versus accidental leak as variables failed to yield an R2 greater than 16.15% for response variables of 3, 14, 60, and 90 day return differential, excess beta differential, and rolling beta correlation differential, indicating that the financial impact on breached companies was highly idiosyncratic.

  • Based on returns, the most impacted industries at the 3 day post-breach date were U.S. Financial Services, Transportation, and Global Telecom. At the 90 day post-breach date, the three most impacted industries were U.S. Financial Services, U.S. Healthcare, and Global Telecom.

The market isn't going to fix this. If we want better security, we need to regulate the market.

Note: The article is behind a paywall. An older version is here. A similar article is here.




Student Cracks Inca Knot Code

2018-01-18T13:12:31Z

Interesting....

Interesting.




Article from a Former Chinese PLA General on Cyber Sovereignty

2018-01-17T12:23:39Z

Interesting article by Major General Hao Yeli, Chinese People's Liberation Army (ret.), a senior advisor at the China International Institute for Strategic Society, Vice President of China Institute for Innovation and Development Strategy, and the Chair of the Guanchao Cyber Forum. Against the background of globalization and the internet era, the emerging cyber sovereignty concept calls for breaking through the...

Interesting article by Major General Hao Yeli, Chinese People's Liberation Army (ret.), a senior advisor at the China International Institute for Strategic Society, Vice President of China Institute for Innovation and Development Strategy, and the Chair of the Guanchao Cyber Forum.

Against the background of globalization and the internet era, the emerging cyber sovereignty concept calls for breaking through the limitations of physical space and avoiding misunderstandings based on perceptions of binary opposition. Reinforcing a cyberspace community with a common destiny, it reconciles the tension between exclusivity and transferability, leading to a comprehensive perspective. China insists on its cyber sovereignty, meanwhile, it transfers segments of its cyber sovereignty reasonably. China rightly attaches importance to its national security, meanwhile, it promotes international cooperation and open development.

China has never been opposed to multi-party governance when appropriate, but rejects the denial of government's proper role and responsibilities with respect to major issues. The multilateral and multiparty models are complementary rather than exclusive. Governments and multi-stakeholders can play different leading roles at the different levels of cyberspace.

In the internet era, the law of the jungle should give way to solidarity and shared responsibilities. Restricted connections should give way to openness and sharing. Intolerance should be replaced by understanding. And unilateral values should yield to respect for differences while recognizing the importance of diversity.




Jim Risen Writes about Reporting Government Secrets

2018-01-16T12:58:27Z

Jim Risen writes a long and interesting article about his battles with the US government and the New York Times to report government secrets....

Jim Risen writes a long and interesting article about his battles with the US government and the New York Times to report government secrets.




Fighting Ransomware

2018-01-15T12:43:52Z

No More Ransom is a central repository of keys and applications for ransomware, so people can recover their data without paying. It's not complete, of course, but is pretty good against older strains of ransomware. The site is a joint effort by Europol, the Dutch police, Kaspersky, and McAfee....

No More Ransom is a central repository of keys and applications for ransomware, so people can recover their data without paying. It's not complete, of course, but is pretty good against older strains of ransomware. The site is a joint effort by Europol, the Dutch police, Kaspersky, and McAfee.




Friday Squid Blogging: Japanese "Dude Food" Includes Squid

2018-01-12T22:12:53Z

This seems to be a trend. As usual, you can also use this squid post to talk about the security stories in the news that I haven't covered. Read my blog posting guidelines here....

This seems to be a trend.

As usual, you can also use this squid post to talk about the security stories in the news that I haven't covered.

Read my blog posting guidelines here.




XKCD's Smartphone Security System

2018-01-12T18:51:43Z

Funny....

Funny.




Facial Recognition Is Coming to Retail

2018-01-12T12:29:44Z

Summary article....

Summary article.




Fingerprinting Digital Documents

2018-01-11T18:50:00Z

In this era of electronic leakers, remember that zero-width spaces and homoglyph substitution can fingerprint individual instances of files....

In this era of electronic leakers, remember that zero-width spaces and homoglyph substitution can fingerprint individual instances of files.




Yet Another FBI Proposal for Insecure Communications

2018-01-11T13:05:40Z

Deputy Attorney General Rosenstein has given talks where he proposes that tech companies decrease their communications and device security for the benefit of the FBI. In a recent talk, his idea is that tech companies just save a copy of the plaintext: Law enforcement can also partner with private industry to address a problem we call "Going Dark." Technology increasingly...

Deputy Attorney General Rosenstein has given talks where he proposes that tech companies decrease their communications and device security for the benefit of the FBI. In a recent talk, his idea is that tech companies just save a copy of the plaintext:

Law enforcement can also partner with private industry to address a problem we call "Going Dark." Technology increasingly frustrates traditional law enforcement efforts to collect evidence needed to protect public safety and solve crime. For example, many instant-messaging services now encrypt messages by default. The prevent the police from reading those messages, even if an impartial judge approves their interception.

The problem is especially critical because electronic evidence is necessary for both the investigation of a cyber incident and the prosecution of the perpetrator. If we cannot access data even with lawful process, we are unable to do our job. Our ability to secure systems and prosecute criminals depends on our ability to gather evidence.

I encourage you to carefully consider your company's interests and how you can work cooperatively with us. Although encryption can help secure your data, it may also prevent law enforcement agencies from protecting your data.

Encryption serves a valuable purpose. It is a foundational element of data security and essential to safeguarding data against cyber-attacks. It is critical to the growth and flourishing of the digital economy, and we support it. I support strong and responsible encryption.

I simply maintain that companies should retain the capability to provide the government unencrypted copies of communications and data stored on devices, when a court orders them to do so.

Responsible encryption is effective secure encryption, coupled with access capabilities. We know encryption can include safeguards. For example, there are systems that include central management of security keys and operating system updates; scanning of content, like your e-mails, for advertising purposes; simulcast of messages to multiple destinations at once; and key recovery when a user forgets the password to decrypt a laptop. No one calls any of those functions a "backdoor." In fact, those very capabilities are marketed and sought out.

I do not believe that the government should mandate a specific means of ensuring access. The government does not need to micromanage the engineering.

The question is whether to require a particular goal: When a court issues a search warrant or wiretap order to collect evidence of crime, the company should be able to help. The government does not need to hold the key.

Rosenstein is right that many services like Gmail naturally keep plaintext in the cloud. This is something we pointed out in our 2016 paper: "Don't Panic." But forcing companies to build an alternate means to access the plaintext that the user can't control is an enormous vulnerability.