Teams: "Innovation Navigators"​ Across America...

As our four teams of two, finished their final presentations of the prototypes they had designed and developed over the past month, we could all see the smiles of accomplishment. Of the pride on their faces, as the sun begins to set on the West coast.

This small patriotic group of “Innovation Navigators” were now ready for the next phase of their National Security Cohort methodology. To implement and test their outcomes in our respective geographic metro areas of the United States.

Sector Teams from Chicago, Denver, Los Angeles and San Diego. All major centers of our economic force and with substantial Critical Infrastructure entities to protect and increase their resilience to a spectrum of Operational Risks.

"Building Awareness of the need to change is now their primary mission. Their opportunity to recruit, educate, network and share vital information."

The people in their Areas of Responsibility (AOR) will soon have greater awareness, of the need to change.

Soon thereafter, they will have the desire to participate and support the change. They will gain knowledge on how to change.

They will learn the process to implement desired skills and achieve new behaviors.

Our “Team of Teams” will embark on their mission of reinforcement to sustain the change.

The journey they have just completed over the past 30 days has provided them new insights. It has created new relationships.

The outcomes are just the results of their purpose for joining the team, yet the new dialogue, challenges and new colleagues are what is most rewarding.

Creating something “New” as a small team that helps to solve a “National Security” problem-set is the true outcome.

What endures are the trusted relationships. This becomes the most valuable asset we attain together.

How might you and your team become “Innovation Navigators” to make a difference and serve a vital purpose in our nation?

November in the United States is always a renewed focus on our Veterans, on our National Security and Defense including our domestic Critical Infrastructure Protection.

As you gaze at our U.S. Flag and say the “Pledge of Allegiance” or listen to Taps, wipe that tear from the corner of your eye. 

Now get out there and make a difference…Onward!

Complacency: Zeros & Ones of Safety...

How might you increase your own resilience to known potential risks in your business operations or even personally this week, or this month?

We all know that growing up, Mom and Dad would teach us, “Don’t talk to strangers”. “Don’t play with matches”. “Wear your seat belt”. Why?

Even a U.S. President is famous for his quote: “Trust But Verify”.

Our life long history of financial transactions and your own personal biometric identity, has made its way online and into the Zeros and Ones digital realms of the U.S. government, Google, Amazon, Apple, Nordstroms and even Netflix.

The single phone number and the e-mail address you have retained for a decade or more, tells almost your entire life story. Where, What, When. How.

In the years past, as you were experiencing all the new mobile technologies and digital services available to you, remember that so too, are the “Nation States” and the “International Criminal Syndicates.

You, the “Human Being” operator, are the single greatest risk to your business and your family safety.

Is it possible that your own personality traits are being exploited by commercial enterprises? Yes.

Is it conceivable that every time you provide a phone number at your retail check out stand to gain rewards, that this contributes to your profiling by Artificial Intelligence (Ai) algorithms with Data Brokers? Yes.

Your business organizations safety and your own families potential vulnerabilities to a spectrum of Operational Risks, are continuously at stake.

When will you make a commitment to change your behavior and to build a discipline that endures and increases your resilience at work and at home?

So what?

If you as a Mother or Father, or Brother or Sister have ever said, “You can’t have a phone until you are 13,” then you have a personal and vital life opportunity before you.

If our own society that is visible in our own cities and geography, has evidence of rising risk and lower levels of personal safety, you might think of our vast searchable World Wide Web as just the top of the “Iceberg”. 

However, 90% as you may know, is below the surface and not visible, also known as the “Dark Web”.

"Yet most average users of corporate business networks have little insight into the growing losses from ransomware. A review of 2021 8-K filings with the U.S. Securities and Exchange Commission reveals a more complete picture of the financial damage from ransomware." CSO Online by Cynthia Brumfield

It all begins with a click in an e-mail or text message, from those behind the curtain, or below the surface, utilizing their “Social Engineering” processes across millions of users profiles, purchased somewhere on the Dark Web.

Personal Profiles built and donated as a result of your own activities and actions. Why do you think that the “Digital Forensics” industry is booming?

So what is the solution? How can the growing threat ever be minimized?

It begins here. Less complacent attitudes and behavior in the Board Room and the Family Room is our only hope. It is our only proactive solution towards true resilience.

Just Remember. Don’t play with matches or digital unknowns. Teach someone else the same...

Never Forget: Beyond 9/11 & Adapting Inside the Enterprise...

"Being a patriot doesn't mean prioritizing service to government above all else.  Being a patriot means knowing when to protect your country, knowing when to protect your Constitution, knowing when to protect your countrymen, from the violations of and encroachments of adversaries.  And those adversaries don't have to be foreign countries."  Ed Snowden

One could wonder whether even just one of the individuals working with your organization internally or externally has the same or similar mindset of "Ed".  The question is, what are you doing as an Operational Risk Management(ORM) leader, to be legally proactive in your "Insider Threat" approach with employees, partners and your extended supply chain?

The adversary working with you inside your company, agency or partner, doesn't always start out to bring loss events to your enterprise.  It could take years, or months to develop a real justification in the adversaries mind, yet even when the activities and behaviors are evident, they are all to often missed, never understood or just too late to interrupt:

The National Counterintelligence and Security Center (NCSC) and the National Insider Threat Task Force (NITTF) are today partnering with federal agencies across the government to launch “National Insider Threat Awareness Month” during September 2019. Throughout September, the Office of the Director of National Intelligence, the Department of Defense, the FBI, the Department of Homeland Security, the Department of State and other federal agencies will be holding events to emphasize the importance of safeguarding our nation from insider threats and to share best practices for mitigating those risks.  

How could you and your organization improve and adapt your current practices to raise the bar of excellence?  What can you do each day to make the quality and the results of your programs even better?

First, begin to understand the process by which events can trigger new behaviors in an individuals perceived stressors and lack of personal control.  Second, expand your proactive organizational toolkit, to include such proven technologies such as sentiment analysis for marketing purposes.

These same tools with the proper legal oversight and "Acceptable Use Policy" can be effective in your early warning systems.  Enterprise Risk Management also incorprates oversight and protections for privacy and civil liberties.

Here are five steps to be proactive at your organization in the U.S. this month of September 2019:

• Create, refine and share your organizations "Insider Threat Program "(InTP) vision.
• Educate, clarify and communicate the authorities, roles and policies of the program.
• Validate tools, models and sources of information.
• Plan ahead for the utilization of automated tools and human behaviors observed.
• Seek better solutions to a continuously changing enterprise & supply chain environment.

Never Forget.  We have all heard the thought "Never Forget," when it comes to our recent anniversary of 9/11.  Yet we must simultaneously remember, that our adversary may be hiding in plain sight...

Unthinkable: Adapting in New World Disorder...

Will 2018 bring more data breaches, lost laptops and insider threats than 2017?  This is why CSO's, CPO's and corporate General Counsels have their teams working overtime.

When the enemy is increasing their attacks, utilizing new strategies and leveraging the existing base of compromised organizational intellectual and data assets, the future horizon becomes ever more clear. 

The statistics don't lie.  1579 documented Data Breaches occurred in 2017. Up 44.7% according to reports by the Identity Theft Resource Center (ITRC) compared to the previous year.  It is the new normal.

The Insider Threat Program (InTP) however, remains a key focus for Operational Risk Management (ORM) professionals because human behaviors are exaggerated during periods of stress, fear and uncertainty. This means that people who may have never considered doing something to jeopardize their reputations, may now be up against a wall.

When there is no obvious exit and no way out, people will do extraordinary things to get ahead, beat the odds and hedge their own risk portfolio of life.

In Joshua Cooper Ramo's book "The Age of the Unthinkable", "Why the New World Disorder Constantly Surprises Us and What We Can Do About It" the author discusses the concept of Deep Security. His analogy of how to think about "Deep Security" is the biological immune system:

"A reactive instinct for identifying dangers, adapting to deal with them, and then moving to control and contain the risk they present."

The key word in Ramo's writing is "Adapt".  Being Adaptive.  However, prior to this there are two other very vital words that we feel are even more imperative. Instinct. Identifying. In other words, Proactive Intuition.

Ask any savvy investigator on how she solved the case and you may hear just that, "I had a hunch."

Talk with a Chief Privacy Officer in any Global 500 company.  You might get them to admit they have a sense that their organization will be the target of an "Insider data breach" incident in the coming year or two.

Do you remember signing off on reading and your acceptance of the employee handbook?  When did your organization last make changes to the Corporate Employee policies?  We would start with the updates to the following sections:

• MEDIA CONTACT
• SOCIAL MEDIA POLICY
• REMOTE ACCESS POLICY
• E-MAIL, VOICE MAIL AND COMPUTER NETWORK SYSTEM PRIVACY
• (YOUR ORGANIZATION) RIGHT TO ACCESS INFORMATION
• SYSTEMS USE RESTRICTED TO COMPANY BUSINESS
• FORBIDDEN CONTENT
• PASSWORD SECURITY AND INTEGRITY
• INTERNET ACCEPTABLE USE POLICY
• POLICY ON USE OF SOFTWARE
• COMPANY PROPERTY
• PROTECTION OF TRADE SECRETS/NON-DISCLOSURE OF COMPANY INFORMATION 

Due to the increasing complexity of IT systems, cloud computing, data networks and the hundreds or thousands of laptops and mobile devices circling the globe with company executives and employees is enough to predict that a major breach will occur.

Being adaptive and having proactive intuition in the modern enterprise does not come natural. You have to work at it and it requires a substantial investment in time and resources to make it work effectively.  Proactive Intuition.

Once you realize that all of the controls, technology and physical security are not going to keep you out of harms way, you are well on your way to reaching the clairvoyance of "The Age of the Unthinkable."

Social Strategy 140: Direct Action #Risk...

Twitter real-time direct action (DA) "Information Warfare" between nation states is a daily task. Current and future Operational Risk Management (ORM) priorities will encompass the imperative to staff "Corporate Intelligence Unit" Fusion Centers.

A prudent Operational Risk strategy, shall include a "Big Data" capability combined with deep social intelligence analysis. Here is a historical FLASHBACK in time, to one example of why leadership is devoting new resources and investment to these internal risk management capabilities:

New Diplomatic Avenue Emerges, in 140-Character Bursts
By SOMINI SENGUPTA October 3, 2013

UNITED NATIONS — "Countries all over the world, dictatorships and democracies alike, have in the last few years sought to tame — or plug entirely — that real-time fire hose of public opinion known as Twitter. 

But on the sidelines of the General Assembly meeting over the last couple of weeks, ministers, ambassadors and heads of state of all sorts, including those who have tussled with Twitter the company, seized on Twitter the social network to spin and spread their message. 

At the height of the diplomatic negotiations last week over a United Nations Security Council resolution that would require Syria to turn over its stockpile of chemical weapons, the American ambassador to the United Nations, Samantha Power, used Twitter to preempt criticism of the measure as lacking teeth because it had no automatic enforcement provision."

What does this mean for the global enterprise, who circumnavigates the planet to initiate and manage daily business operations?  It means that "Information Warfare" and intelligence collection and analysis for the enterprise continues, as a top strategic and operational function.  It requires continuous Operational Risk strategy oversight.

How an organization directs personnel and manages daily decisions, is more mobile information-centric than ever before.  Just stand at any major sidewalk intersection in a major city across the world and count the number of people looking at their "Smart Phones" as they cross the street.

The speed of business that is fueled by leaders commenting via social media, can even influence commodity traders in futures markets and operational planners in the "E-ring."

Leadership has the ability to by-pass the traditional media juggernauts to get their message heard in seconds.   The President of a major stock exchange or of a G20,  has a "Duty of Care" to it's constituents to make the correct public decisions.  At the same time, a moral and ethical context begins to evolve, in the vast battle space of 140 digital characters.

The use of a social media post or Tweet from the Board Room to the Court Room; from San Francisco to Tehran, or from Wall Street to Hong Kong, is a risk-oriented asymmetric information tactic delivered in plain sight.

Those social tactics, visual in the landscape of our modern day quest for influence, notoriety or outcry, shall forever shape the breadth of our enterprise digital risk management spectrum...

Startup Strategy: Opportunity of Digital Trust in a New Era...

The startup ecosystem of new ideas for SaaS platforms or mission based digital solutions are becoming evermore robust, in our growing economy.  As a result, Operational Risk professionals are more in demand to help new co-founders adapt to the legal, compliance and consumer transparency requirements, that will soon descend upon them.

It makes sense, that when you are starting a new company you first are focused on the product/mission and who the intended market or user will be.  Yet soon after this is defined and the "Go-to-Market" strategy is in place, there is a tremendous amount of Operational Risk design and implementation of internal capabilities, that will be required.  In just Social Media, here is just one example:

"As social networks continue to mature, they increasingly take on roles they may not have anticipated. Moderating graphic imagery and hate speech, working to address trolling and harassment, and dealing with dissemination of fake news puts companies like Facebook and Twitter in powerful societal positions. Now, Facebook has acknowledged yet another challenge: Keeping your data safe from surveillance. That’s harder than it may sound. When you post something publicly on a social network, anyone can view it—including law enforcement or federal agencies."

Since the dawn of the Internet, new startup companies have been developing algorithms and bots to scour the vast landscape of "data oceans" for relevant content.  As public Internet tools, databases and consumer-oriented web sites were developed for even Blogs (Blogger.com) such as this one, other companies were figuring out how to capture the data content in their searchable systems.

Years later, startups developed ways to develop the API as a new product-set, so that other companies could embed and utilize a set of data or capability and have it more integrated with a new set of functionality or service mission.  What is one company in this category focused on Twitter?  Gnip.com:

"PowerTrack provides customers with the ability to filter a data source’s full firehose, and only receive the data that they or their customers are interested in. This is accomplished by applying Gnip’s PowerTrack filtering language to match Tweets based on a wide variety of attributes, including user attributes, geo-location, language, and many others. Using PowerTrack rules to filter a data source ensures that customers receive all of the data, and only the data they need for your app."

So what?

If you are a startup company that is planning on a pledge to your customers to "Keeping your data safe from surveillance," just as the juggernaut Facebook is also currently doing, you have a tremendous amount of work and new processes/systems to get in place.  You are embarking not only on the steep growth curve of adding new customers and revenue; you are simultaneously under the mandate to help achieve a higher level of "Digital Trust" with those same customers.

Developing the policy alone is only the start.  Here is how Twitter is addressing it:

"To be clear: We prohibit developers using the Public APIs and Gnip data products from allowing law enforcement — or any other entity — to use Twitter data for surveillance purposes. Period. The fact that our Public APIs and Gnip data products provide information that people choose to share publicly does not change our policies in this area. And if developers violate our policies, we will take appropriate action, which can include suspension and termination of access to Twitter’s Public APIs and data products."

How Facebook and Twitter and Snapchat or LinkedIn and all of the hundreds of Social Media companies will scale up enforcement, is now the big question.  Maybe they have the deep pockets and resources to build and operate their "Digital Trust" business unit.  What about the new startup with only 6 or 7 figures in the bank from a seed or even "A" round of funding?

The policy implications and new federal laws being drafted in the United States and the European Union may be good indicators of where the future requirements will be defined for a new startup.  In the EU this week, the G20 finance ministers are converging on the topic of "Cyber Crime" soon after a recent indictment:

"Two intelligence agents from Russia, another G20 member, with masterminding the 2014 theft of 500 million Yahoo accounts. The indictment was the first time U.S. authorities have criminally charged Russian spies for cyber offences including for computer fraud, economic espionage, theft of trade secrets, and wire fraud."

How will the new startup who is focused on addressing transparency, privacy, and surveillance now "Enable Digital Trust of  Global Enterprises."  Here is a glimpse from the latest PwC CEO Survey:

"Yet, if forfeiting people’s trust is a sure-fire route to failure, earning their trust is the single biggest enabler of success. As an example, the progression from assisted to augmented to autonomous intelligence depends on how much consumers and regulators trust machines to operate on their own. That, in turn, depends on whether those who create the machines have the right risk and governance structures, the means to verify and validate their claims independently and the mechanisms to engage effectively with stakeholders."

"In short, trust is an opportunity, not just a risk. Many CEOs recognise as much: 64% think the way their firm manages data will be a differentiating factor in future. These CEOs know that prioritising the human experience in a virtual world entails treating customers with integrity."

Welcome to the new era of achieving Digital Trust...

Higher Purpose: A Mission of Trust...

As you walk into that next meeting with another co-worker or even a colleague for a coffee catch-up, pause and reflect.  Think about how you could (1) make this encounter not only productive and (2) simultaneously enhance the relationship of trust.

All too often we are focused on getting something of value from the meeting.  We are blinded by the purpose of the meeting or have preconceived ideas on how the time together will be of value, or a waste of time.  Now think differently.

A true professional in any business, unit, agency or organization is there to "Build Trust".  The day-to-day or hour-to-hour interactions you have with others is vital.  A true professional in any domain, industry or vocation, can aspire to a higher purpose than the normal roles of a stated job description.

One thing is certain when it comes to meeting with other people and the value or outcomes obtained, trust is a major factor in the future outcomes of the relationship.  Have you ever wondered why certain people you meet, take so long to trust you?  How are you going to accomplish your intended purpose working with this superior or subordinate if they don't trust you?  What about that new client or business partner?

At the most fundamental level, the trust gurus and authors have been writing about a spectrum of trust for eons:

Zero Trust >>>>>Trust Exists >>>>>Implicit Trust

From ground zero of your first encounters with another person, your goal is to move towards a point on the spectrum where "Trust Exists".  Then your goal is to keep moving to the right and towards a place of "Implicit Trust".  This is when you don't even think about it anymore.  How many people do you know where this is the case, even within your own family?

So what?

As an Operational Risk professional, velocity is everything.  Yet you already know that uncontrolled velocity alone can be fatal.  The risk factors associated with business, government or the manufacturing process of a highly engineered electronic component are always present.  Always changing.  Creating new obstacles or new harm.  In our current state, 24x7x365 pervasively connected society, the trust factors are even more important and vital to moving towards "Implicit Trust".

Here are a few examples in the news this past year, where Operational Risk Management (ORM) was a factor:

Samsung Galaxy Note 7

On 2 September 2016, Samsung suspended sales of the Galaxy Note 7 and announced an informal recall, after it was found that a manufacturing defect in the phones' batteries had caused some of them to generate excessive heat, resulting in fires and explosions. A formal U.S. recall was announced on 15 September 2016.

Yahoo

When Yahoo said on Thursday that data from at least 500 million user accounts had been hacked, it wasn't just admitting to a huge failing in data security -- it was admitting to the biggest hack the world has ever seen.

Until Thursday, the previous largest known hack was the 2008 breach that hit almost 360 million MySpace accounts, according to a ranking by the "Have I been pwned" website. Like the Yahoo breach, the hack was only publicly disclosed this year after data was offered on a hacker forum.

National Healthcare Fraud

Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings.

National Security Agency

A federal contractor suspected in the leak of powerful National Security Agency hacking tools has been arrested and charged with stealing classified information from the U.S. government, according to court records and U.S. officials familiar with the case.

In each one of these few example cases, relationships between people started with a meeting encounter.  Over time, the product, service or personal relationship outcomes involved a failure of people, processes, systems or external events.  The core components of Operational Risk Management (ORM).

Raising the level of trust across personal, business or government encounters is only possible, with effective "TrustDecisions".  The Decisions to Trust another person, product or service have several elements.  These are vital for the mission to grow towards "Implicit Trust" and simultaneously with the safety and security necessary to reduce the risk of failure.

The Mission

The mission as a co-founder of a new startup or the CEO of a Global 500 is to ensure the survival of the organization. We all know the failure rate for new companies. Just ask Dun & Bradstreet for the statistics or even your local Venture Capitalist who is celebrating failures these days. So beyond just the survival of the organization, is the imperative to establish a cultural and operating environment where people feel encouraged, creative and unencumbered to fulfill their job requirements and goals.

The Take Away

Operational Risks are inherent in any new or established business endeavor. The earlier the Operational Risk Management (ORM) design begins in the trusted relationship evolution, the more resilient you will ultimately become. The framework of the system-of-systems, the look and feel of the cultural environment and the end state visions are all at stake. Take the time and include the expertise to work on the "TrustDecisions" foundation of your enterprise.

Ensure the survivability of the new products or service solutions, that are so valuable to our economy and our nation.  Embrace Operational Risk Management early in your relationships and allow it's presence while it preserves all that you have worked for and dreamed of...

CIU: Corporate Intelligence Unit...

Over six years later approaching 2017, Operational Risk Management (ORM) professionals are experiencing the "New Normal."   In a 2010 CSO Magazine sponsored eCrime Digital Watch Report and survey of 535 companies there are some observations on Operational Risk Management worth examination.

This CERT report the same year was focused on the "Insider Threat" and the area of concern is still on "Digital Incidents by Insiders."  Seven years later, these numbers have only increased:

• Past 12 months the number of incidents reported increased 16%
• The per incident monetary loss (mean) was $394,700.00

Yet these two items are just the trend these days as our global work place becomes more mobile and stratified using more partners, offshore suppliers and other 3rd parties to accomplish the daily tasks and workloads. What is even more alarming are the following stats from the survey:

• 72% of the incidents were handled internally without any legal action or law enforcement.
• 29% of these incidents could not identify a subject responsible for committing a crime.
• 35% of these incidents could not proceed due to a lack of evidence.

Interpreting these numbers prompts several questions worth discovering. First, why were 28% of the incidents handled with some form of legal action or law enforcement? One of two reasons that we can surmise. The incident was exposed to the public as a result of the magnitude or harm that was caused by the incident. The organization was prepared to capture evidence, properly investigate the incident and pursue a recovery of the loss either in a civil or criminal process of law.

Second, why were 35% of the incidents unable to proceed due to a lack of evidence? The organization may be lazy or apathetic to these loss events or may have an insurance policy that covers these types of losses and was able to successfully recover the almost $400,000.00 incident average through this process.

Or, the organization is not capable of leveraging a sound "Digital Governance" and "Legal Policy" framework in order to properly investigate incidents that come from their own internal work place ecosystem of employees, partners, suppliers and other 3rd parties.

In order to gain "Strategic Insight" into these vital Operational Risk matters within the enterprise the organization must establish an intelligence-led investigation. Once the proper evidence collection and analysis is completed on the incident then members of a corporate crisis team or threat management council can make more informed decisions. That brings us to the final question. Why in 71% of the incidents was a subject not identified as being responsible?

The answer to this question has much to do with the previous one where there was a lack of evidence. However, our hunch is that many of these insider incidents were the result of an employee error, mistake or unintended consequences. The lost or stolen laptop from the unlocked car may fill some of this category.

Why would it be in the best legal interest of an organization to have a robust evidence collection capability supported by a sound "Policy Governance and "Legal Framework"?

• Duty of Care
• Duty to Warn
• Duty to Act
• Duty to Supervise

This blog has touched upon these four vital areas of vulnerability to adversarial litigation in the past because we know that whether you ask these questions internally or the state's Attorney General and the FBI ask these questions the answers must be discovered:

1. What did you know?
2. When did you know it?
3. What are you doing about it?

While the number of loss events due to errors or omissions and many times due to a lack of proper training and awareness programs is growing, so are the incidents as a result of the insider threat from:

• Fraud
• Sabotage
• Espionage
• Trade Secrets Theft

The modern day enterprise with preemptive, robust and collaborative law enforcement mechanisms in place has accepted the reality of the threat perspectives in their workplace ecosystem:

• Some individuals who make threats ultimately pose threats.
• Many individuals who make threats do not pose threats.
• Some individuals who pose threats never make threats.

Make sure you read those a few times. As a result of the reality that the workplace ecosystem is an evolving, dynamic and rapidly changing set of human elements, behaviors and motivations the justification for creating more "Strategic Insight" is a necessary mitigation strategy. There is a growing trend today for these enlightened organizations to create and effectively provide the resources for a corporate threat management team. This team is comprised of a spectrum of members that span the digital to physical domains within the company. This includes the Chief Risk Officer, General Counsel, Internal Audit, Public Relations, Human Resources, Corporate Security and Information Technology.

In another less formal survey by Dr. Larry Barton of 630 employers the question was raised on the employee communication channel that caused the company to act on a risk. 38% were through a digital messaging medium such as e-mail, text messages and blogs or social networking sites. The ability to monitor over one third of employee communication channels remains a daunting task to this day.

Beyond the utilization of threat assessment or management teams, enterprises are going to the next level in creating a "Corporate Intelligence Unit" (CIU). The CIU is providing the "Strategic Insight" framework and assisting the organization in "Achieving a Defensible Standard of Care."

The framework elements that encompass policy, legal, privacy, governance, litigation, security, incidents and safety surround the CIU with effective processes and procedures that provides a push / pull of information flow. Application of the correct tools, software systems and controls adds to the overall milestone of what many corporate risk managers already understand.

The best way in most cases to defend against an insider attack and prevent an insider incident is to continuously help identify the source of the incident, the person(s) responsible and to correlate information on other peers that may have been impacted by the same incident or modus operandi of the subject. "Connecting The Dots" with others in the same company or with industry sector partners increases the overall resilience factor and hardens the vulnerabilities that are all too often being exploited for months if not years.

In retrospect, you can be more effective investigating and collecting evidence in your company to gain a "DecisionAdvantage". To pursue civil or criminal recovery of losses from these insider incidents, you may not go to law enforcement, but it's likely they will come to you once they get a whistle blower report, catch the attacker and/or they have the evidence that you were a victim.

What side of the incident spectrum you are on, either proactive or reactive could mean the difference on whether the attackers continue their schemes and attacks while continuously targeting those with the greatest vulnerabilities. In some cases, those attackers include the plaintiff bar and your evidence of "Duty of Care" is the bulls eye.

Intuition: Security in a World Without Borders...

"Technology is not going to save us.  Our computers, our tools, our machines are not enough.  We have to rely on our intuition, our true being."  --Joseph Campbell

On a crisp Fall morning, one week after the U.S. National Election we were lining up outside the Harry S. Truman Building outside the United States Department of State.  The Bureau of Diplomatic Security - Overseas Security Advisory Council was hosting it's 31st Annual Briefing.

This years briefing was focused on "Security in a World Without Borders" and as we passed through our ID check and screening, the anticipation was high.  It's private sector constituents from the Fortune Global 500 to the small U.S.-based professional services firm had one key similarity.

Leaders in attendance recognize that their business is integrated forever with a exponentially expanding system of interconnected machines.  CxO's across the globe are competing for business in the era of "The Fourth Industrial Revolution" where the vulnerabilities extend beyond the Critical Assets of the enterprise.

This years keynote address was by Richard Davis, CEO of U.S. Bancorp.  His talk was heartfelt by many as he recounted his rise from the days at the branch level securing the vault.  Now he emphasized most of his effort was focused on Operational Risk Management (ORM).  Data, Identities and Distributed Denial of Service (DDoS) were on his mind everyday now.

Beyond the threats of a Post-ISIL Levant and operating in a world of Transnational Organized Crime, the room was almost full on Day 2 for this 10:45AM panel discussion:  "Developing an Insider Threat Program" and was moderated by Elena Kim-Mitchell, ODNI.

The OSAC participants on the panel were:

• Roccie S., Capital One | Financial
• Stanley B., Rolls-Royce North America | Defense Industrial Base
• Joseph L., Southern Company | Energy

Each of these experts described the high-level architecture of their respective organizations design and approach to an "Insider Threat Program" (InTP) and they had consensus on one key element.

The "Human Factor".  The point that they all wanted to insure the audience understood clearly, is that all of the analytics software, data loss prevention (DLP) tools and sophisticated technology was not going to stop a determined and motivated adversary.

So what?

Your intuitive abilities as a human shall not be ignored or discounted.  How many times have you said to yourself, "I knew something wasn't right with that person".  In fact, many times we are alerted to the anomalous behavior of a co-worker because we have the human-factors of intuition that is working 24x7 in our brains.

Gavin de Becker has said it best in his book "The Gift of Fear," yet we must not forget that behavior is something that can be applied to everyone:

• We seek connection with others.
• We are saddened by loss and try to avoid it.
• We dislike rejection.
• We like recognition and attention.
• We will do more to avoid pain then we will do to seek pleasure.
• We dislike ridicule and embarrassment.
• We care what others think of us.
• We seek a degree of control over our lives.

As our software systems learn and we begin to rely more often on the algorithms to recognize, translate and predict, we must not lose sight of our human intuition.  Do you have it?  Yes.  Are you using it more often and more effectively?  We hope you will be.

How often have we all said, the signs were there.  How many times are the clear and present indicators in the workplace being ignored?  A organizations "Duty of Care" is continuously at stake.  Human Factors alone, just as software systems alerts alone will continuously expose the enterprise to significant loss events.  Here is just one example from the Washington Post:

The Pentagon’s Defense Security Service announced this year that contractors will be required to implement programs that are designed “to detect, deter and mitigate insider threats.” Contractors will be required to designate a senior insider threat official to oversee the program and provide training on how best to implement it.

While many details of the Martin case are not yet known, it is clear that it is not good for Booz Allen to have a second employee charged with stealing secrets from one of its most important customers, officials said.

What is the solution?

Government contractors, private sector businesses and their small and medium enterprises that are within the supply chain ecosystem for products and services, are continuously challenged.  They are under the growing umbrella of a myriad of federal acquisition guidelines.

In addition, various export, civil liberties and privacy laws focused on preserving the integrity and trust of the United States in an international marketplace, are compliance mandates for your global commerce.

New solutions are required as a result of the increasing spectrum of threats from individuals in the workplace, to the cyber nexus infiltrating your trade secrets and theft of intellectual property.

The TrustDecisions “Insider Threat Program” (InTP) has been designed from the ground up with organizations operating in highly regulated “Critical Infrastructure” sectors, including Financial, Energy and the Defense Industrial Base (DIB).

Many companies have already started the establishment of an “Insider Threat Program” (InTP).  Utilizing Subject Matter Experts from TrustDecisions will provide your organization with the confidence and continuous assurance that you stay on course.

“Achieving Trust” with employees, clients and suppliers is paramount in our digital 24x7x365 economy.  Designing and adapting the InTP to your unique culture and the changing threat landscape is a vital strategy.

Trade Secrets: Gearing up for DTSA...

The Fortune Global 500 and the smallest research and development organizations in the U.S. have another ruleset to keep their eye on this week.  It is named DTSA or S.1890 - Defend Trade Secrets Act of 2016 has passed the Senate.  Operational Risk Management (ORM) is preparing for the next addition to national laws.

The attribution of cyberespionage adversaries has been gearing up since the Sony Pictures hack.  The private sector has been hunting and identifying those shadow individuals and nation state special units for years.  Now the lawyers can get more aggressive with civil actions.

The question remains, will another law deter the actions by global organized crime and the intelligence community of some significant nations?  How will attribution and more aggressive civil actions in foreign jurisdictions make a difference?

As a global organization, can you access your database of confidential trade secrets?  No different than the task of the identification of information assets that you are going to protect, you need an inventory.  What are they and where are they?  Everyone knows the formula for "Coca-cola" is written on a single piece of paper that is locked up in a vault in Atlanta, GA right?  Or is it?

There are trade secrets across America that have been stolen by operatives working inside organizations.  They may be preparing to leave the U.S. for another country outside the reach of law enforcement and the legal process for seizing the stolen property.  That is going to change soon.

The EX-Parte Seizure Order is part of the Trade Secrets bill that allows a trade secret owner to obtain an order from a judge for U.S. marshals to seize back the trade secret from the alleged bad actor without prior warning. This is to protect the trade secret owner from having the alleged bad actor skip the country or destroy the evidence before it is recaptured.

Now that Trade Secrets are in the same legal and enforcement category with patents and trademarks, you can predict that your legal budgets will need to be adjusted, upwards.  In general, what is a Trade Secret?

The subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. While a final determination of what information constitutes a trade secret will depend on the circumstances of each individual case, clearly unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence.

The effort to make intellectual property a "Trade Secret" is another strategy in itself. The determinations to designate something a trade secret is going to depend on the invention or the data itself. We understand. So what?

A Chinese businessman pleaded guilty Wednesday (March 23) in federal court in Los Angeles to helping two Chinese military hackers carry out a damaging series of thefts of sensitive military secrets from U.S. contractors.

The plea by Su Bin, a Chinese citizen who ran a company in Canada, marks the first time the U.S. government has won a guilty plea from someone involved with a Chinese government campaign of economic cyberespionage.

The resolution of the case comes as the Justice Department seeks the extradition from Germany of a Syrian hacker — a member of the group calling itself the Syrian Electronic Army — on charges of conspiracy to hack U.S. government agencies and U.S. media outlets.

Our adversaries are determined. They are already here. It has been documented for years. Let the next wave of legal indictments and seizures begin. One thing is certain. The "Insider Threat" is still present and your organization can do better. The ability to effectively utilize the correct combination of controls, monitoring, technology and internal corporate culture shifts will make all the difference. What are you waiting for?

Vigilance: The Casualty of the Truth...

On the other end of a planned cyber threat are the motives and plans by a person.  Sometimes that person puts into play the use of a "Bot" to carry out many of their planned steps in their scheme.  Operational Risk Management (ORM) professionals have been classifying these cybercriminals for a decade or more yet even now in 2016 they are getting more formal profiles:

BAE Systems, the London-based, multinational security company, recently released profiles of “six prominent types of cybercriminals” and detailed how they could hurt companies around the globe, officials say.

Threat intelligence experts at BAE Systems have compiled a list, “The Unusual Suspects,” that has been created from “research that uncovers the motivations and methods of the most common types of cybercriminals,” according to BAE. “The intention of the campaign is to help enterprises understand the various enemies they face so they can better defend against cyberattacks.” BAE Systems officials have profiled six cybercriminal types:

• The Mule – naive opportunists that may not even realize they work for criminal gangs to launder money;
• The Professional – career criminals who work 9-to-5 in the digital shadows;
• The Nation State Actor – individuals who work directly or indirectly for their government to steal sensitive information and disrupt enemies’ capabilities;
• The Activist – motivated to change the world via questionable means;
• The Getaway – the youthful teenager who can escape a custodial sentence due to their age;
• And The Insider – disillusioned, blackmailed or even over-helpful employees operating from within the walls of their own company.

These individuals and groups have caused billions of dollars in losses and caused significant harm to millions of people and organizations.  Now what?

It will be many more years to come, before the laws catch-up to the technology and those who use the vector of the Internet to carry out their crimes against humanity.  Law enforcement has their hands continually tied by the laws and the geographic challenges of a global epidemic.  Governments and politicians are in constant battle over the privacy vs. security philosophy and all the legal issues.

While the wheels of Parliament, or the U.S. Congress slowly turn and the mechanisms for law enforcement become more robust for evidence collection, investigations and prosecutions, there are significant strategies of resilience that we must focus our respective vigilance.  It is not anything new per se, just a renewed emphasis and a new commitment to redesigning our digital environments.  We can do better.

For now, what if we just pick one cybercriminal type to focus on.  The "Insider".

The "Insider" is most likely in almost every formal organization today, working diligently to mask and perpetuate their goals until they are revealed.  It is your "Duty of Care" to continuously deter, detect, defend and document within your enterprise.  The "Insider" could be anyone and so how can the organization work ever more so vigilantly?

It begins at the core of the business and the culture that surrounds those principles within your company, your team or your relationship with suppliers.  The environment you build and sustain shall have the transparency and the elements necessary to sustain a culture where the "Insider" is incapable of operating.  Where the culture itself, makes the environment impossible for the "Insider" to operate without disclosure.

We would encourage Operational Risk Management (ORM) professionals to incorporate new found strategies, new management tools and a renewed effort to extinguish the "Insider" threat across the globe.  The best way we can do this today, is to work on the culture and to establish the foundations for future "Trust Decisions" within the enterprise.  The root of changing the culture and achieving the desired future environment, begins with every single decision to trust.

The journey ahead will be long and full of new found challenges.  The vision of the future and the outcomes received will soon be more apparent.  Now the real work begins to start the journey with your own organization, with each person and understanding the environment and culture you seek.  And remember:

"In war, truth is the first casualty."

Aeschylus
Greek tragic dramatist (525 BC - 456 BC)

Legal Risk: The Insider Threat from Outside Counsel...

What will the "New Normal" be for the United States in the era of increased scrutiny on privacy law, civil liberties and the continuous quest for the security of the Homeland?  Operational Risk Management (ORM) professionals are ever more focused on "Information Operations" and counterintelligence functions while simultaneously working side-by-side, with their own General Counsel.  The laws in each state are changing and being updated as the Federal legislation stalemate continues:

Connecticut Updates its Data Security Laws, Imposing Stringent New Requirements By Ellen Moskowitz on July 15th, 2015 Posted in Legislation

On June 30, 2015, the Governor of Connecticut signed into law S.B. 949, “An Act Improving Data Security and Agency Effectiveness.”[1] The new law updates Connecticut’s data security laws, including by adding a 90-day hard deadline for data breach reporting, requiring companies in some cases to offer data breach victims a year of free identify theft prevention services, imposing new and specific data security program requirements on health insurance companies and other entities subject to Insurance Department regulation, and requiring state agencies to impose certain detailed security requirements on state contractors that maintain personal information. With a near constant stream of data breaches affecting entities from health insurers to retail giants to the government, the law responds to growing fears of data security.

Under the new law, beginning October 1, 2015, a data breach will require any person or entity conducting business in Connecticut to give notice “without unreasonable delay,” but now no later than 90 days after discovery of the breach, to state residents whose personal information was breached or reasonably believed to have been breached. The Connecticut Attorney General stated in a press release that 90 days is an “outside limit” that does not diminish his discretion to take action against entities who “unduly delay” notification.[2] Importantly, the law also requires the provision of at least twelve months of free identity theft prevention and mitigation services, but only in cases where Social Security numbers are breached or reasonably believed to have been breached.

If you happen to be concerned about the "Insider Threat" within your enterprise, then you realize the importance of creating the foundations for a sound legal framework.  One that addresses the rules that must be followed and the protocols for building trust with key corporate partners.  This includes the outside counsel that your enterprise engages with on an annual basis.

So what legal duty of care do your retained outside counsel have to secure your information?  What do they have in the environments that they operate in that may cause additional legal risks for your enterprise?  Do they understand the difference between information security and confidentiality?

First tier supply chain partners such as outside counsel are no different than the cloud provider or the HVAC contractor that may have access to the corporate network.  So what is the root cause of substantial intellectual property theft and industrial espionage targeted on law firms?  Failing to understand the vast landscape of "Operational Risk."  This includes negligent conduct and intentional misconduct.  So what can you do now to improve the outcomes of managing the legal risks of "Outside Counsel"?

Start a Dialogue:  Request a commitment to review the privacy vs. security environment of the key retained firms who provide the outside legal work for the enterprise.  Provide a case example of your corporate information security structure and priorities.

Ask Questions:  The whole spectrum of information security deserves a deep dive in the dialogue on managing digital information, making effective "Trust Decisions" and addressing eDiscovery and Records Management questions.

Team Together:  What if you worked with your outside firm to create a solution that included a collaborative design, prioritized execution, insisted upon cooperative feedback and insured continuous improvement?  Get your legal teams to train together with your CISO and CIO security teams.

Revise the Engagement Letter:  The contracting language must include the nuances of information security, privacy controls and an informative strategic plan for the inevitable point in time when there is a data breach at your outside counsel.  More here:

As Willie Sutton supposedly said, he robbed banks “because that’s where the money is.”  That also explains why law firms and lawyers are increasingly the targets of cyber-intrusion, particularly phishing scams.  Apparently, phishing in legal waters can yield a full net of stolen information.

“Most likely” to take the bait
Verizon’s 2015 Data Breach Investigations Report has found that a company’s legal department is among the ones that are “far more likely to actually open [a phishing] e-mail than all other departments.”

In case you’ve been living under a rock, “phishing” is the attempt to obtain sensitive information fraudulently by means of a deceptive electronic communication that appears to come from a trustworthy source.  (Some link the term to the indie rock group Phish, but according to Computerworld magazine, the term was coined round 1996, with the obvious analogy to the sport of angling using a lure.  Under that view, the “ph” is a nod to an old form of telephone hacking known as “phone phreaking.”)

Shockingly, Verizon found that 23 percent of recipients open phishing messages, and 11 percent click on the fatal attachments.

Insider Threat: Trusted Systems of the Future...

In the Defense Industrial Base in particular, corporate executives are on edge these days, anticipating the next game changing crisis phone call from the General Counsel.  The conversation is one that every CxO expects to have at some point in their career, yet the pace of multi-million dollar incidents is rapidly increasing.  The origin typically begins somewhere within the Operational Risk Management (ORM) landscape including People, Processes, Systems or External events.

 INTRODUCTION

The Board of Directors are evaluating the current funding levels for Operational Risk Management programs.  The focus on "Insider Threat" is a renewed area of scrutiny in light of the number of intellectual property thefts and national security classified information leaks.  This means increased funding potential for programs of Defensive Counterintelligence.  Next we shall look at the strategic challenges involving Homeland Security, Domestic Intelligence and Technological Innovation.

STRATEGIC CHALLENGES

You may have heard that Corporate Security and Operational Risk Officers are consistently using the acronym M.I.C.E. to describe the motivations for rogue insider employees. Money, Ideology, Compromise and Ego are the main categories that human behavior can be associated with, when the realization that an incident has occurred.

The "Why" question is asked early on by the General Counsel and the Chief Risk Officer (CRO), to try and understand the motivation by the employee.

One challenge is the current ecosystem of Homeland Security in the United States. Consistently oriented on the protection of catastrophic threats to the homeland in general and not to an individual company, much of the Homeland Security Intelligence (HSI mechanism is myopic and not predictive.  The laws associated with U.S. persons and the current state of employee protections is a white paper in itself. However, the scrutiny of laws associated with the theft of intellectual property and corporate trade secrets is gaining momentum.

The challenges of "Domestic Intelligence" and the intersection of "Technological Innovation" is now on a collision course in the courts.  Previous legal decisions such as United States v. Jones, 132 S. Ct. 945, 565 U.S. ___ (2012) was a Supreme Court Case that sets an example.  As interpretations of the constitutional rights of U.S. citizens are decided where the legal evidence of metadata is collected from technology innovations and is deemed to violate those rights, the challenges for domestic intelligence applications become more apparent.  This includes law enforcement and internal corporate security programs within the private sector enterprises.

CORPORATE CULTURE ISSUES

There are three competing perspectives within the enterprise organization that present a continuous cultural tug-of-war:

• Human Resources
• Privacy & Legal Governance
• Security & Risk Management

In a recent break out session of a private industry focused "Information Sharing Initiative" workshop, the comments were heard by all of us present.  A Chief Security Officer in the room came right out and admitted that his team does everything they can to avoid interaction with personnel from the Human Resources department.  This "Elephant-in-the-Room" topic is one that most corporate officers need to get out on the table.  The cultural friction between a Human Resources department tasked with protecting the privacy and integrity of the employees personal data, typically clashes with those charged with securing the assets of the organization.

Even though the U.S. does not have anything close to the EU Data Protection Directive, the legal precedents are being played out in the courts.  In the U.S., workplace privacy is a rapidly evolving spectrum of technology, metadata and big data analytics:

Employees typically must relinquish some of their privacy while at the workplace, but how much they must do so can be a contentious issue. The debate rages on as to whether it is moral, ethical and legal for employers to monitor the actions of their employees. Employers believe that monitoring is necessary both to discourage illicit activity and to limit liability. Although, with this problem of monitoring of employees, many are experiencing a negative effect on emotional and physical stress including fatigue and lack of motivation within the workplace.

RECOMMENDATIONS

The "Insider Threat" and Defensive Counterintelligence strategies are up against the employee privacy and data governance legal battles in the U.S..  However, there is a a way forward to design the future architecture for this particular Operational Risk Management domain, beyond more legally detailed "Acceptable Use Agreements".

Just as any agreement on standards or rules takes a process and a dedicated architecture, so will this arena of human behavior, technology innovations and vital digital information assets.  Effective and transparent "Trust Decisions" that become embedded in the architecture to enable application of the agreed upon rulesets, is the ultimate goal.  Once humans have the confidence in a mechanism for making these Trust Decisions consistently and with integrity, the presence of prudent risk management will then be realized.

The private sector will lead this effort in collaboration with government, yet it will design it's own protocols and rulesets to plug-in to new federal standards.  The application of continuous monitoring of threats within the private sector workplace will evolve quickly by using these new frameworks and new tools.  Trust Decisions will be made in milliseconds, as systems execute the rules that have been coded into software and the latest big data analytics logic.

We recommend that the private sector continue to establish a consortium of cross-sector companies to interface with the new ISE.gov framework entitled "The Data Aggregation Reference Architecture."

The need for greater interoperability is clear. To protect national interests, intelligence and law enforcement agencies must be able to collect, accurately aggregate, and share real-time analytical information about people, places, and events in a manner that also protects privacy, civil rights, and civil liberties. The President’s National Strategy for Information Sharing and Safeguarding (NSISS) recognizes this as a priority national security issue, and speaks directly to this challenge. The Data Aggregation Reference Architecture (DARA) is in direct response to NSISS Priority Objective 10, “Develop a reference architecture to support a consistent approach to data discovery and entity resolution and data correlation across disparate datasets,” The DARA provides a reference architecture that can enable rapid information sharing, particularly for
correlated data, but also for raw data, by providing a framework for interoperability between systems, applications and organizations.

These private sector companies need to standardize across sectors, just as the government is embarking on the mission to improve this across agencies.  You see, the blind spots that the government has discovered in sharing information across it's own departments and agencies is no different in private industry.  The failure of Energy companies sharing information with other Energy companies or the same within the Financial Services industry ISAC model is not new.  However, the speed and integrity of future "Trust Decisions" on Insider Threats will always depend on the timeliness and quality of the data.

The international agreements on ISO standards has a long history.  Quality and Environmental standards are most common.  The 21st century has delivered us privacy and information security "management system" standards established and agreed upon internationally.  The standards and rulesets integrated with government shall have interoperability with the private sector.  The private sector shall collaborate with government on the architecture for information sharing.  The future state outcomes will enhance our trust in the management systems that have been designed from the ground up, to execute the rules.  A good example from ISO follows:

Cloud computing is quite possibly the hottest, most discussed and often misunderstood topic in IT today. This revolutionary concept has reached unexpected heights in the last decade and is recognized by governments and private-sector organizations as major game-changing technology.

In the January/February 2015 ISOfocus issue, we address some of the basic questions surrounding cloud computing (including the savings and business utility the technology can offer). We also explore security concerns of the cloud services industry and how these are addressed by ISO/IEC 27018, the first International Standard on safeguarding personal data in the cloud.

CONCLUSION

 The future of the "Insider Threat" solutions will not be designed by just one company or one government.  Just as the Internet standards that have evolved to support billions of IP addressable devices using data science and machine learning, so too will the private sector discover the way forward on transparency and data governance.  What are the odds that an "Insider Actor" hired at company "A" may then move to Company "B" once and if they determine the controls and processes are too difficult or will catch them in their unauthorized activities?

The safety, security and privacy of our organizations in concert with an international community is imperative.  People must believe in the integrity of the "Trust Decisions" being made each second by the Internet devices they hold in their hands and simultaneously by the organizations they devote their working lives to each day.

Legal Risk: Forensic Analysis of Supply Chain...

Corporate environments where a dedicated Chief Information Security Officer (CISO) works along side the General Counsel (GC) to tackle Operational Risk Management (ORM), continues to be a significant challenge.  The introduction of court certified tools for forensic analysis of information on both desktop and mobile devices to include phones, tablets and anything with a storage capability (USB Jump Drives) has created an executive level debate.  "What" information will we perform forensic analysis on, "why" and "when" will we do it?

The "Why" question is most obvious, like the analysis of DNA, the zeros and ones (0's and 1's) that make up the digital fingerprints (user names, passwords), blood-type (e-mail, SMS) and other behavioral evidence is important to associate the identity of the person(s) using a certain digital device. In addition, the ability to track the whereabouts of a particular digital device via GPS metadata or IP address, can also provide additional context and evidence, to be considered in the forensic examination.

The "What" information is in many cases going to be preceded by the "When" and has much to do with the policy in place within the corporate environment.  Modern "Acceptable Use Policy" may spell out that any device can be examined at any time, if it is a corporate issued and owned product.  Personal devices allowed in the workplace may be subject to a completely different set of policy doctrine, that falls under state and federal statutes.

The "When" question could be on a continuous basis and tied to a particular event, such as an employee who has given notice to leave the organization.  The event could also be as a result of an alarm or alert that the Information Security team receives from an automated system, within the corporate network.  So back to the challenges faced by the CISO vs. the GC on the Operational Risk Management process and addressing all of these issues.  Is it a legally sound manner that also achieves a "Defensible Standard of Care?"

Now imagine all of this going on oblivious to the confines of a small-to-medium size enterprise (SME). These organizations are typically defined as under 1000 employees yet can be defined further by the type of business and industry.  Now imagine that this particular SME, is operating within the Defense Industrial Base and is in the professional services supply chain of the top three U.S. government contractors, who are bidding on the next generation bomber for the U.S. Air Force.  What do we mean by supply chain?  This particular SME, is one of the outside counsel for Lockheed Martin, Boeing or Northrop. Yes, this law firm is in the information supply chain, working on legal matters associated with a top tier defense contractor.

If you are the GC and CISO at LM, Boeing or Northrop, what controls and policies do you have in place or service level agreements (SLA) that spell out the process to forensically examine the mobile devices of the lawyers and associates of your outside counsel? When?  Why?  The public disclosure of law firms and their associates being the target of nation states espionage is several years old.  When was the last time as a GC or CISO you had a closed door summit with the information supply chain of law firms working for your Defense Industrial Base (DIB) corporation in the U.S.?  If you are a SME law firm, working in the supply chain of the DIB, What, Why and When are you using Forensic Analysis with all of your Partners, Associates, Paralegals and other people in your legal ecosystem?

Operational Risk Management (ORM) spans every department and every employee.  It requires prudent application of the use of forensic analysis, as a vital component of a comprehensive counterintelligence program.  And remember the why.  Spear Phishing of law firms has been a major warning since 2009 and over six years later, it is still growing because it remains so effective.

Intellectual Property: Material Risks Disclosure- Assumption of Breach...

The rules of the game may have changed across the corporate landscape.  Corporations that have been proactive in the management of Operational Risks, are making headlines in the published press. There is a race to build new 100,000 Sq. Ft. data centers around the globe, in order to satisfy the insatiable competitive appetite of bandwidth hungry enterprises:

Sony Pictures Entertainment is fighting back. 

The studio behind the “Spider-Man” franchise and “The Social Network” has taken technological countermeasures to disrupt downloads of its most sensitive information, which was exposed when a hacking attack crippled its systems in late November.

The company is using hundreds of computers in Asia to execute what’s known as a denial of service attack on sites where its pilfered data is available, according to two people with direct knowledge of the matter. 

Sony is using Amazon Web Services, the Internet retailer’s cloud computing unit, which operates data centers in Tokyo and Singapore, to carry out the counterattack, one of the sources said. The tactic was once commonly employed by media companies to combat Internet movie and music piracy. 

In one of the most devastating cyber security breaches in recent memory, a hacking group calling itself Guardians of Peace claimed to have stolen just under 100 terabytes of Sony Pictures’ financial information, budgets, payroll data, internal emails and feature films and has slowly leaked portions of it to public file-sharing sites such as PasteBin.

The cyber war has been facilitated by the rise of substantial new digital weapons and the cloud-based compute power to make it all happen.  The question is not who is behind the latest DoS of "PasteBin" as much as when the next Stuxnet-like design will gain favor, by a private sector organization.  You see, the use of sophisticated offensive cyber malware is not new.  No different than conventional chemical weapons that are developed by nation states, the variants and new "Zero Days" ultimately could end up in the hands of militias and clandestine dark sites on the net for sale.

In the recent book "Countdown to Zero Day" by Kim Zetter, the point is made:

Before Stuxnet, most of America’s military and intelligence cyber-operations focused on stealing or distorting data, or used cyber-tools to help direct U.S. weapons. Stuxnet was envisioned by U.S. officials as a replacement for a conventional weapon. Using a computer virus or worm to gum up the works of something from within would provide an alternative to, say, destroying a nuclear facility from the air. Stuxnet appears to have done that. “Stuxnet stands alone as the only known cyberattack to have caused physical destruction to a system,” Zetter writes.

The physical digital copying, erasure or even encryption of corporate data, that then becomes the focus of an extortion plot, is the Operational Risk Management (ORM) business problem that remains on your Board Room doorstep. The Sony Board of Directors now understand the liability of dealing with a $100 million plus incident, as an adverse material event, spawned from the cyber domain.  The rules of the digital game have changed.  Now what can be done about this particular wake up call?

Besides getting your outside counsel ramping up for a tremendous cache of billable hours and your Information Governance Teams burning the midnight oil, the future strategy is now evolving.  How many digital files in your corporation contain proprietary Intellectual Property (IP)?  If you don't know the answer, then we recommend that you start counting.  You need to figure out what the value is, of all this data and for good reason.  At the other end of the Operational Risk spectrum are the SEC regulatory issues in the U.S..  Jeffrey Carr explains here:

“Consistent with the Regulation S-K Item 503(c) requirements for risk factor disclosures generally, cybersecurity risk disclosure provided must adequately describe the nature of the material risks and specify how each risk affects the registrant. Registrants should not present risks that could apply to any issuer or any offering and should avoid generic risk factor disclosure.” 

The value of your particular organizations Intellectual Property can then be compared against the requirements for your IP, on a global basis.  What countries or companies are spinning up Research & Development operations in the same IP space that your organization is operating in?  What U.S. companies are encouraged to relocate a manufacturing plant overseas?  Why is this significant? The correlation is that if there are a rising number of foreign R&D labs focused on your particular category of IP, then you can guess that your company is going to be a substantial target for sustained industrial espionage.  Regulatory burdens exist and yet may not be the greatest risk.

When there is not enough time or money to infiltrate your organization with insider human assets, then the outsourcing of digital theft campaigns will begin, or a combination of insider theft operations in cooperation with outsourcing.  The hackers-for-hire trade, is larger than you may know.  How much do you think a nation state would pay for a "Stuxnet" Zero Day on the open market in todays U.S. dollars?  Mid to high six figures.  Not likely.  7 or 8 figures is getting closer.

While the malware designed for the exfiltration of data from Sony Pictures is different than Stuxnet's design to disrupt a specific type of Siemens Controller for a certain IR-1 centrifuge, the intent and motive may be quite similar.  To disrupt and destroy the capabilities of your adversary.  Now the question for Sony is whether this was a nation state or simply a "disgruntled insider," or possibly both that can be attributed to the sabotage attack.

The complexity and the longevity of the risk is evident.  The magnitude and the impact of the destruction is apparent.  Are you sure you don't have an Insider Threat?  See appendix C here:

This fourth edition of the Common Sense Guide to Mitigating Insider Threats provides the most current recommendations of the CERT® Program (part of Carnegie Mellon University's Software Engineering Institute), based on an expanded database of more than 700 insider threat cases and continued research and analysis. It introduces the topic of insider threats, explains its intended audience and how this guide differs from previous editions, defines insider threats, and outlines current patterns and trends. The guide then describes 19 practices that organizations should implement across the enterprise to prevent and detect insider threats, as well as case studies of organizations that failed to do so. Each practice includes features new to this edition: challenges to implementation, quick wins and high-impact solutions for small and large organizations, and relevant security standards. This edition also focuses on six groups within an organization-human resources, legal, physical security, data owners, information technology, and software engineering-and maps the relevant groups to each practice. The appendices provide a revised list of information security best practices, a new mapping of the guide's practices to established security standards, a new breakdown of the practices by organizational group, and new checklists of activities for each practice.

Information Leaks: Risk Of The Data Supply Chain...

There is a well known threat that has been talked about with the Board of Directors behind closed doors for years. This threat is not new to most Operational Risk Management (ORM) professionals and yet executive management is still in denial that it could happen to us. Have you or someone in your C-Suite ever awakened one morning and wondered how the companies new plans for a merger are now in the published press? What about that new research and development breakthrough that ends up with another company with a similar process being patented a week or a month ahead of you?

What is the threat? Call it competitive intelligence, economic espionage, press leaks, loose lips or advanced persistent threat (APT), it does not really matter. The threat remains from all those people, rivals, industry peers, countries, states, allies and enemies that are working 24 x 7 x 365 to copy your valuable information and use it for their own advantage. What advantage depends on who obtains the valuable information and how they will eventually use it or sell it.

What is even more fascinating to most subject matter experts, is the amount of information that is still created and allowed to be compromised in some way that is false, fake and designed to confuse the adversary. So what is it, that much of executive management still does not understand about all of this? 

The "source" of the vulnerability that is leaking or allowing the secret or confidential information to be compromised. They still to this day are naive to the potential source. This source is not even inside their own company or organization in many cases. It is within the organizations data supply chain somewhere, but where is it exactly?

The answer is only possible to narrow down, if you absolutely know where your data and secret or confidential information is collected, transported and stored, in the hands of trusted third parties, outside the four walls of your business. That is the remedial first step. Creating a definitive map of who has custody of your data through some kind of third party agreement. The agreement could be with any number of key business partners in your data supply chain:

• Banker
• Venture Capitalist
• Accountant
• Attorney
• Insurer
• Internet Service Provider
• Utility
• Data Telecom Provider
• Wireless Telecom Provider
• Payments Processor
• Document Custodian or Shredder

This short list is a good place to begin your quest for better understanding where the source of your information leak may be. Now think about this list and ask yourself who might have the most robust set of staff, resources and technology savvy people to keep your data safe. Regardless of the service level agreements or engagement letters in place, who is the most vulnerable on this list?

Even more important may be the question of which one of your data supply chain business partners, has the least amount of resources, people and state-of-the-art detection systems for the APT, Zeus, and other mechanisms that are exfiltrating your data to another country. When was the last time you asked any of your business partners to walk you into their IT department for a look around with your CIO or CTO?

Believe us when we say that if you get that "Deer in the Headlights" look on your business partners face, you are in trouble. You can bet that the attackers are not attacking you, as much as they are attacking your data supply chain. If you say in public or on your public filings that you have your primary outside counsel firm as "Red, White and Blue," you can be assured that your adversaries will take notice.

You see, just because your organization has spent millions or billions on new data centers with the most sophisticated technologies available to counter your cyber adversaries, how can you be sure that your business data supply chain has done the same? There is only one way to do that and it is in person and on site. You may consider this level of due diligence before handing over your business for the merger and acquisition project or the development of a vital new component for your new patented product. A model "Request for Information" (RFI) on the business partners controls and capabilities for securing your sensitive, confidential and secret information shall be a first step requirement.

The second step shall be to get an inventory of what systems your data supply chain partner has in place to mitigate the risk of a data breach. At the top of that list, should be the management system that governs all the other hardware and software systems. So even if your business partner says they are using RSA NetWitness on their corporate networks and Fixmo MRM for their mobile devices, that is not going to be enough.

The overarching "Management System" is not about technology. It is not about your favorite eDiscovery or computer forensics guru. It is about the way your business partner trains and educates it's people. It is about how those people use relevant business controls to secure your secrets, confidential data and records. Look at their behavior around this topic of "Achieving A Defensible Standard of Care" and you will soon discover whether you have found the most ideal banker, accountant or attorney to entrust to your digital supply chain.

Privacy 3.0: The Genesis of EarthCom...

Information classification in the private sector is gaining traction again as the nature of sensitive national security leaks are published in the popular press.  Data breach laws and cyber legislation is a daily discussion on Capitol Hill.  CISOs and CSOs even at the Washington Post are in "Incident Response Mode" after a successful phishing exploit by the Syrian Electronic Army.  These Operational Risk Management (ORM) challenges are not only on the rise because of the amount of information that is exchanged each day in an era of the "Internet of Things"; these risks are now front and center as "Privacy 3.0" evolves in the Cloud.

Andrew Serwin of The Lares Institute puts it all in context:

The question confronting modern-day privacy scholars is this: Can a common law based theory adequately address the shifting societal norms and rapid technological changes of today’s Web 2.0 world where legislatures and government agencies, not courts, are more proactive on privacy protections?

As private sector companies produce the technology solutions to accomodate the exponential expansion of our global ICT ecosystem, we must acknowledge the genesis of it's origin.  Human beings.  The products, systems, software and patents are the result of inventions by mankind.  Yet there is evidence that the evolution of ICT, whether it be in hardware, software or the data itself has similarity to biological evolution.  For decades scientists have studied the similarity of the ecosystems of information to the biology of immune systems.  These same smart and bold people have written books, journals and peer tested papers on the subject of transformational systems thinking.  Growth and change in the digital universe follows a biological path found in nature.

The organizational growth cycles are:

• Forming = entrepreneurship
• Norming = production
• Integrating = diversification

This cycle of growth has many labels, yet systems and organizational experts will say that the integrating phase of growth will encounter a bifurcation point, where it is necessary for the system to again innovate and form something new.  To adapt to its new environment.  If the system does not break away and create a new forming stage of the growth cycle, it will eventually perish.  This is why organizational change experts invented such innovations as the "Skunk Works" or why a private sector company breaks off a business unit and creates a whole new company.

Privacy 3.0 is now four years old.  Are we now at the bifurcation stage of the societal information growth cycle and the speed of business is leaving existing government rule of law in the rear view mirror?  Andy Serwin from his 2009 paper said:

Given the changes in society, as well as the enforcement mechanisms that exist today, particularly given the FTC's new focus on “unfairness,” and the well-recognized need to balance regulation and innovation, a different theoretical construct must be created--one that cannot be based upon precluding information sharing via common law methods. Instead, the overarching principle of privacy of today should not be the right to be let alone, but rather the principle of proportionality. This is Privacy 3.0.

As information flows through the manmade veins of supersonic light or invisible waves of zeros and ones around our planet, we are approaching a "Breakpoint."  A place in time, where the system will need to bifurcate in order to survive.  The system of privacy proportionality in government circles has been four levels of classification:

• Restricted = For Official Use Only (FOUO)
• Confidential
• Secret
• Top Secret (TS)

In the years ahead, as you hold your IP Phone (iPhone) to update Twitter, Foursquare, Facebook or WordPress App, you are behaving in the Privacy 3.0 ecosystem.  While you are at work in the public or private sector using Google Business Apps in the cloud, your behavior and your words including personal data such as your semantics or GPS coordinates, are entering one of four levels of sensitivity.

In order to make the leap to our next systemic "Breakpoint", we will need to design in proportional privacy to our Operational Risk Framework.  Without it, the system will decay and ultimately cease to exist.  Is privacy an after thought in your organization?  What information governance education takes place on a continuous basis?  How do you monitor and measure?  Have you tagged the information into four levels of sensitivity?  These are just a few of the questions that the Privacy 3.0 enterprise is encountering, at the genesis of an ICT "EarthCom."