Tech Firm Ubiquiti Suffers $46M Cyberheist 54
An anonymous reader writes: Brian Krebs reports that Ubiquiti Networks, known for their wireless networking hardware, has lost $46.7 million to a scam in which thieves were able to impersonate employees and initiate fraudulent wire transfers. Ubiquiti was able to recover only $8.1 million of the amounts transferred, and an additional $6.8 million is subject to legal injunction. Krebs explains, "Known variously as 'CEO fraud,' and the 'business email compromise,' the swindle that hit Ubiquiti is a sophisticated and increasingly common one targeting businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. ... CEO fraud usually begins with the thieves either phishing an executive and gaining access to that individual’s inbox, or emailing employees from a look-alike domain name that is one or two letters off from the target company’s true domain name." The theft was disclosed in Ubiquiti's quarterly financial report.
Companies should say"No clicking links from email" (Score:1)
Re:Companies should say"No clicking links from ema (Score:5, Insightful)
There's a reason why they say that if you need to contact your bank, you should call the telephone number on the back of card, and reject any attempts by an entity claiming to be your bank that contacts you out of the blue, unless that caller literally asks you to contact the bank via the contact information that you already have on-file.
Scams like this require the mark to be complacent. With this level of finances that's completely inexcusable.
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With this level of finances that's completely inexcusable.
With this level of finances the temptations are overwhelming. Any mark that doesn't demand a cut is an idiot.
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It really makes you wonder how anyone this dumb gets to become CEO of anything that important.
Even so, rule number one of finances: The CEO doesn't handle them.
I get that they'd just lost their financial officers; in that case, you find temporary ones, from within the company if necessary, who nonetheless are not the CEO.
(If you've got a small business, let's face it, you don't have a CEO. You don't have that much hierarchy. So for very small businesses where one person wears many hats, OK. But usually that
Re:Companies should say"No clicking links from ema (Score:4, Informative)
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You're confused. Just because someone in IT journalism calls it the "CEO scam" doesn't mean it's the CEO who falls for the phishing scheme that compromises their email account. It could be someone in the A/P side of procurement, it could be someone in the CTO's office, or the company's comptroller.
Right. None of those people should have access to make any major transfers of funds. Anything more than a million or so should have to go through the CTO. If you're doing many billions of dollars in business, maybe more than a few million.
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I think you mean all financial transactions above a threshold should be approved by the CFO or his delegated staff.
Er, yeah, I meant CFO, thank you for assuming that. But I really do mean that all transactions over a certain amount should be going through the CFO himself.
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Some companies do many of these over the course of a day. If there are CFO-level wire transfers (using amount as a criteria), and the CFO isn't available (sick, vacation, in transit, etc) should the business grind to a halt? Someone (or a few someones) will need to have that ability, in order to avoid a bus factor of 1 on the entire business.
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Nobody in AP should be making any payment unless there's an invoice to pay it against. There shouldn't be an invoice unless there's a supplier/vendor master record. There should be a PO too.
You don't normally allow anyone to create more than one item in the chain. Certainly not all of them.
Of course, if some C level twerp has a habit of pulling rank to do an end-run around established best practices because agile or something then all bets are off.
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Why would you bother phoning the bank after the call, other than to warn them that someone is trying to defraud you?
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There's a reason why they say that if you need to contact your bank, you should call the telephone number on the back of card, and reject any attempts by an entity claiming to be your bank that contacts you out of the blue, unless that caller literally asks you to contact the bank via the contact information that you already have on-file.
I've had many messages on my answering machines over the years that say things like, "This is [so-and-so] from [bank]. There is a problem with your account. Please call us at [phone number] right away." And that phone number is NOT the one on the back of my card, or on my monthly statement.
So I always called the number on the card and eventually got transferred to someone who said, yes, there is a problem with your account, that was us calling you.
Facepalm!
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And who will enforce that demand? The idiot CEO who's falling for the scam in the first place?
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Good luck getting that set up. You won't be able to hear yourself think over the howls of the end users (some of which are C-level executives) that that policy will generate. Especially with the text-only policy.
The problem is there, the solution is known and technically possible, but you won't fix it, because it would inconvenience the end users.
The true problem in this situation is that people are stupid. You'll never get that fossil in A/R who really uses the optical drive tray as a cup holder, to und
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But I think internally companies can demand their employees to not click on links from email.
They can demand anything they want, but will the employees listen? Noooooooooooooo.
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I did (Score:2)
Their products are actually very good. This seems to be a case of social engineering, not a technical security breach. Social Enginering is very hard to defend against, since humans are involved. Both high ranking and minimum wage types can be too trusting and / or gullible.
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I keep idiot-proofing everything and the damn liars just keep on building better idiots!
SEC Filing where it was disclosed and more info (Score:5, Interesting)
There's also some info in the WSJ writeup. [wsj.com]
Their CFO had left in April and their Chief Accounting Officer just resigned
Bummer to see this happen to Ubiquiti as they seem like a good company.
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Or the CFO suspected something shady was going on, but couldn't prove it and didn't want any part of it.
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Failure of basic accounting controls (Score:4, Interesting)
If employees are initiating wire transfers on the basis of simple emails - the problem is less one of them being scammed than it is lack of basic accounting controls. It's a large scale version of the "toner cartridge" scam, and works on the same principle.
"Trust, but verify [the paperwork]" should be the order of the day. Preventing (or at least raising the difficulty of) this kind of scam is why purchase orders, invoices, etc... were invented in the first place.
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You don't have to hide behind the AC moniker. Here you can speak freely, Mr. Madoff...
I wish (Score:2)
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I wish I was wealthy enough to be defrauded of 46 million dollars...
There's no body who was that wealthy and defrauded. That was some of the operating cash of a fairly good sized publicly traded company funded by lots of investors - you might even be one of them if you own some mutual funds.
Look no further (Score:5, Informative)
Look no further than the sorry state of email today. This problem was fixed 25 years ago:
https://en.wikipedia.org/wiki/Pretty_Good_Privacy#Digital_signatures [wikipedia.org]
One is almost tempted to think that someone is trying to keep private communications open and accessible...
Re: sort of (Score:1)
That was a good start. Colin Robbins and some others had nice write-ups about why it wasn't enough. NSA, etc had nothing to do with it far as I can tell. Essentially, it was a combination of usability, compatibility with commercial clients, and the fact that you run into infrastructure issues the second you operate outside a small, closed group. Plus, you need protection against incoming emails and attachments. So, their solution which is worth FOSS knocking off was (a) a proxy on client that seemlessly doe
just use proven methods... (Score:1)
These attacks would be stopped by a combination of strong endpoint security, a guard protecting transfers, and mail guard + secure comms scheme so people know who's talking to who. These are all fielded as early as the 80's for military and some commercial use. Nexor is an example of a company selling the communications part. Argus, Tresys, Sirrix, LynxSecure, Dell Secure Consolidated Client, QubesOS... all examples of separating internal from risky stuff. Physical air gaps, KVM switches, separate network
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Re: just use proven methods... (Score:1)
Why are transfers so hard to trace? (Score:5, Interesting)
Something I always wonder when fraud occurs involving bank transfers - why can't the money be traced? The whole system works on computers, which are inherently good at keeping records. Even if multiple hops are involved, I see only one reason why law enforcement agencies should not be able to trace funds to their destination - the unwillingness of banks to cooperate.
There needs to be an international banking agreement that facilitates tracking. If some shady offshore bank refuses to sign on with the agreement, participating banks should refuse to transfer money to them.
The fact that such an agreement is not already in place points to the corruptness of our finanacial institutions. There is simply no motivation to impede movement of funds by criminals.
I hope this company is okay... (Score:2)
... Its a great company. I love their stuff.