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Fire-sale: Were Three Leading Organizations Hit By A Global Cyber-Attack?

Cybersecurity
Fire-sale: Were Three Leading Organizations Hit By A Global Cyber-Attack?

Dr. Timothy Summers and Dr. Joseph Wall



On July 8 at 7:30am EST, United Airlines grounded all of its flights, worldwide, due to a system-wide computer glitch.

A spokesperson for the world’s largest airline, Charles Hobart, issued a statement, via email, that it had “experienced a network connectivity issue”. However, it was not until after multiple passengers flooded Twitter with live updates on the situation that the airline issued this official statement on the so called ‘computer glitch’. According to United passengers, the airline’s entire computer system was down and agents were handing out hand-written boarding passes. This interruption affected more than 3,500 flights in the busy morning travel rush.

The transportation disruption causes a large impact on its own; however, it came shortly before an unprecedented, nearly four-hour halt in trading on the New York Stock Exchange (NYSE) occurred for undisclosed ‘internal technical reasons’. Immediately, executives at the NYSE issued a statement that the problem was due to a problem with their computer systems and not the result of any sort of external cyber-attack. As if these two ‘glitches’ were not enough, the Wall Street Journal’s WSJ.com site was down. Also, due to another undisclosed technical issue.

Before lunchtime, three of the United States’ most influential organizations were all brought down by ‘computer glitches’. According to White House Press Secretary, Josh Earnest, “there is no indication that hackers were involved.” Most media outlets have been flooded with reporters and pundits issuing statements that the glitches were not due to malicious activity. Could the ‘computer glitches’ experienced by the world’s largest stock exchange, one of the largest airlines, and one of the most widely visited news media web sites have experienced the simultaneous case of poorly written computer code or hardware failures? Why was the media so quick to universally proclaim no malicious involvement when even a partial investigation was not complete?

According to former Assistant Secretary for Intergovernmental Affairs at the Department of Homeland Security, Juliette Kayyem, “I would never assume that something like this is a coincidence. So I’m sort of surprised how quickly everyone’s coming out. I would assume that there might be something going on.” When asked if she thought these events were coincidence, Kayyem responded, “I would assume the opposite.” Thus, it is at least possible that something a bit more malicious was involved.

Just three years ago, General Keith Alexander, former Director of the National Security Agency (NSA) warned that hackers “could have the ability to take down” large institutional systems. In fact, he further warned that hacker groups, like Anonymous, were beginning to move into a more disruptive direction. It is curious that twelve hours prior to the NYSE trading halt, a member of the hacktivist group, Anonymous, tweeted “Wonder if tomorrow is going to be bad for Wall Street…We can only hope”. The group made fun of its association with involvement.

One thing is sure. There has been a concerted effort by the media to downplay the impact of today’s fortuitous fluke. If you turned on CNN, CNBC, or Bloomberg, you probably noticed that many experts were giving the impression that, although these are incredibly rare and disruptive circumstances, it was “not wildly disruptive”, especially since there are many competing exchanges. But there were a few, like Kayyem, who expressed that today’s situation left a bad aftertaste in the mouths of many investors. Officials would have you believe that the impact of this massive outage is limited; however, the increasing frequency and intensity of similar problems implies something different.

Of course, many may wonder if this will impact their personal finances. The answer is: maybe. If it turns out that this was a cyber-attack, or that such ‘glitches’ continue to increase in frequency and severity, it will severely impact investor confidence in the market. The situation is further compounded by the problems in Greece and China’s recent stock market plunge. Although U.S. officials have expressed concern over the situations in Greece and China, no one has issued a statement regarding a potential linkage between the massive outages experienced by United Airlines, the NYSE, WSJ.com and the impact on economic activity abroad. Are we seeing the beginnings of a real-world fear driven fire-sale?

While most cyber-attacks typically involve one of five primary methods of attack, single attacks historically rely on one primary methodology. Thus, given the variety and complexity of the businesses involved, history suggests router failure at United, and technical issues at the other two are each independently logical explanations. However, past performance does not guarantee future results. Take, for example, the recent situation, in which multiple methods were used to steal money in a $1 billion dollar hacking ring impacting over 100 banks. With countries such as China having recently admitted to engaging in cyberwarfare[1], the combination of the complexity of information technology failures and organizations interested in exploiting weaknesses is becoming overly burdensome for many.

Whatever the case, it is clear that our heavy reliance on technology has very real consequences, especially when considering the potential impact of massive scale cyber-attacks on society.

Although the insurance industry has tried to fill the void by offering products to pay for hacks or failures, many boards of directors have been reluctant to adopt policies, and pricing models nor risk assessment are standardized. Furthering the problem, the lack of standardized guidance across industries and regulators leave wide open the potential for both accidental and intentional breaches of all types to continue, while insiders exploit weaknesses to perpetrate even larger frauds.

Though today’s events may indeed be random, they should serve as a call to action from the public. Too many times, outlets report news without substantiation. Acceptance without questions ultimately leads to failure. Thus, without coordinated study and action, it is only a matter of time until failures or breaches wipe out society’s ability to function. As stated by James Lewis, a cybersecurity specialist at the Center for Strategic and International Studies, to the Wall Street Journal in 2013: “You want to occupy Wall Street? How about turn Wall Street off? Even for a day.”

 

About Dr. Timothy C. Summers

Dr. Timothy C. Summers is the CEO of Summers & Company, LLC and specializes in organizational design and cyber strategy. He is the world's leading expert on hackers and is responsible for developing the field of hacker cognitive psychology.

About Dr. Joseph M. Wall

Dr. Joseph M. Wall is an Assistant Professor at Marquette University and specializes in fraud and arbitrage in the financial markets. He is the world's leading expert on fraud in the professional investing community and is responsible for developing behavioral fraud models.

 

[1] 2013. The Science of Military Strategy. Military Science Publishing House.
















































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