Recent IT Security Breaches & How Organizations Prepare Evan McGrath Spohn Consulting May 23, 2015

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 2 Agenda  Recent Breaches  Cost of a Security Breach  What Hackers Target  Regulatory Compliances & State Codes  Cyber-Terrorism  Things You can do

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 3 Recent Security Breaches

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 4 Recent Security Breaches

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 5 Cost of a Security Breach

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 6 High value data for hackers  Protected Health Information (PHI) –First responders, Ambulatory services  Personal Identifiable Information (PII) –Citizen records, Utility & water records –Criminal records, sheriff departments  Credit card numbers –Property tax payments –Traffic & court fees –Utility bills, water, power –Vehicle registration  Bank account / payroll information

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 7 Regulatory compliance & state codes  Texas Business & Commerce Code  FISMA –NIST SP 800 – 122 –FIPS 200  HIPAA / HITECH Act  Payment Card Industry (PCI)

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 8 Texas Business and Commerce Code T ITLE 11, P ERSONAL I DENTITY I NFORMATION, S UBTITLE B. I DENTITY T HEFT, C HAPTER 521. U NAUTHORIZED U SE OF I DENTIFYING I NFORMATION Sec BUSINESS DUTY TO PROTECT SENSITIVE PERSONAL INFORMATION. (a) A business shall implement and maintain reasonable procedures, including taking any appropriate corrective action, to protect from unlawful use or disclosure any sensitive personal information collected or maintained by the business in the regular course of business. Sec NOTIFICATION REQUIRED FOLLOWING BREACH OF SECURITY OF COMPUTERIZED “…shall disclose any breach of system security, after discovering or receiving notification of the breach, to any resident of this state whose sensitive personal information was, or is reasonably believed to have been, acquired by an unauthorized person. The disclosure shall be made as quickly as possible,…”

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 9 FIPS 200, Minimum Security Requirements for Federal Information and Information Systems, is a mandatory, non- waiverable standard developed in response to the Federal Information Security Management Act of To comply with the federal standard, agencies must first determine the security category of their information system in accordance with the provisions of FIPS 199, Standards for Security Categorization of Federal Information and Information Systems, and then apply the appropriate set of baseline security controls in NIST Special Publication The combination of FIPS 200 and NIST Special Publication requires a foundational level of security for all federal information and information systems. The agency's Risk Assessment validates the security control set and determines if any additional controls are needed to protect agency operations (including mission, functions, image, or reputation), agency assets, individuals, other organizations, or the Nation. The resulting set of security controls establishes a level of “security due diligence” for the federal agency and its contractors. In addition to the security requirements established by FISMA, there may also be specific security requirements in different business areas within agencies that are governed by other laws, Executive Orders, directives, policies, regulations, or associated governing documents, (e.g., the Health Insurance Portability and Accountability Act of 1996) It is important that agency officials (including authorizing officials, chief information officers, senior agency information security officers, information system owners, information system security officers, and acquisition authorities) take steps to ensure that: (i) all appropriate security requirements are addressed in agency acquisitions of information systems and information system services; and (ii) all required security controls are implemented in agency information systems. See for additional information on FISMA compliance. Federal Information Security Management Act (FISMA)

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 10 S ECTION OF THE H EALTH I NFORMATION T ECHNOLOGY FOR E CONOMIC AND C LINICAL H EALTH (HITECH) A CT by requiring HIPAA covered entities and their business associates to provide notification following a breach of unsecured protected health information. I NDIVIDUAL N OTICE : Covered entities must provide this individual notice in written form by first-class mail, or alternatively, by if the affected individual has agreed to receive such notices electronically. If the covered entity has insufficient or out-of-date contact information for 10 or more individuals, the covered entity must provide substitute individual notice by either posting the notice on the home page of its web site or by providing the notice in major print or broadcast media where the affected individuals likely reside. M EDIA N OTICE : Covered entities that experience a breach affecting more than 500 residents of a State or jurisdiction are required to provide notice to prominent media outlets serving the State or jurisdiction. Notice to the (HHS) Secretary: Covered entities must notify the Secretary of breaches of unsecured protected health information. A maximum penalty amount of $1.5 million for all violations of an identical provision. E NFORCEMENT : HIPAA covered entities were required to comply with the Security Rule beginning on April 20, OCR became responsible for enforcing the Security Rule on July 27, (Summary: While HIPAA was established in 1996, it was not until 2009 that we saw widespread enforcement ) HITECH Notification of Breach Laws Issued August 2009

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 11 Payment Card Industry (PCI)  Anyone who stores, process, or transmits credit card data must be PCI compliant  Common PCI validation requirements  Report on Compliance (ROC)  Self-Assessment Questionnaire (SAQ)  Letter of Attestation  Quarterly PCI scans  Sample PCI Data Security Standards Requirements  Annual Penetration Testing (DSS 11.3)  Security Awareness Training (DSS 12.6)  Quarterly PCI scans (DSS 11.2)

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 12 Does PCI DSS apply to merchants who use payment gateways to process transactions on their behalf, and thus never store, process or transmit cardholder data? PCI DSS requirements are applicable if a Primary Account Number (PAN) is stored, processed, or transmitted. If PAN is not stored, processed, or transmitted, PCI DSS requirements do not apply. However, under PCI DSS requirement 12.8, if the merchant shares cardholder data with a third party processor or service provider, the merchant must ensure that there is an agreement with that third party processor/service provider that includes their acknowledgement that the third party processor/service provider is responsible for the security of the cardholder data it possesses. I’m a small merchant who has limited payment card transaction volume. Do I need to be compliant with PCI DSS? If so, what is the deadline? All merchants, whether small or large, need to be PCI compliant. The payment brands have collectively adopted PCI DSS as the requirement for organizations that process, store or transmit payment cardholder data. PCI SSC is responsible for managing the security standards while each individual payment brand is responsible for managing and enforcing compliance to these standards. Myth – Outsourcing card processing makes us compliant Outsourcing simplifies payment card processing but does not provide automatic compliance. Don’t forget to address policies and procedures for cardholder transactions and data processing. Your business must protect cardholder data when you receive it, and process charge backs and refunds. You must also ensure that providers’ applications and card payment terminals comply with respective PCI standards and do not store sensitive cardholder data. You should request a certificate of compliance annually from providers. PCI – Frequently Asked Questions

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 13 Cyber-Crime vs Drug Trafficking?

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 14 Possible cyber-threats …

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 15 Things you can do…  Implement Security Policies & Incident Response Plans  Education: Security Awareness Training  Vulnerability Assessments – Internal & External  Penetration Testing – Internal & External  Wireless Penetration Testing  Social Engineering Exercises  Enterprise Security Assessments –Administrative Safeguards –Technical Safeguards –Physical Safeguards

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 16 Questions & Answers Q&A

Expertise for Navigating Business Challenges © 2011 Spohn Consulting 17 Thank you! Evan McGrath Spohn Consulting Phone: