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Beware 'Spoofed' E-Mails

Law firms, companies and other entities need to be on guard for an increasingly frequent, sophisticated online fraud which uses “spoofed” e-mails.

In the latest incident, a large U.S. company was the victim of what the FBI calls “business email compromise,” said Stu Sjouwerman, CEO of KnowBe4. He said that IT security pros call it an incident of “CEO fraud.”

“It boils down to sophisticated fraud that uses spoofed e-mails to social engineer employees at the C-level and accounting to transfer large amounts of money, in this case just shy of $100 million,” he said.

The latest incident also illustrates an important point for lawyers and legal departments. “This type of corporate liability needs to be taken seriously because cyber liability insurance policies usually exclude this type of CEO fraud, since there are no IT resources hacked,” Sjouwerman explained.

Given these recent attacks, there needs to be changes in how companies and professional firms attempt to be proactive in preventing incidents. “Especially in accounting and legal firms, employees need to be made into the first line of defense, since the bad guys use simple social engineering tricks to get access to the network and endanger all client records,” Sjouwerman said. “Clearly, this issue is not given sufficient attention,” he added. “To use a quote of Kevin Mitnick, our chief hacking officer, 'You could spend a fortune purchasing technology and services, and your network infrastructure could still remain vulnerable to old-fashioned manipulation.'”

“Now more than ever, people are realizing that cyber-attacks are a real threat to all businesses,” Mark Sangster, vice president and industry security strategist at eSentire, explained. “Particularly in the case of vendor risk, smaller vendors are realizing that they're a target, too, even if only to help attackers hook a larger fish. This is precisely why we're hearing more about vendor compliance. It won't be long before vendor compliance becomes a requirement, not an exception to the rule.” ' Ed Silverstein , Legaltech News

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