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6/20/2012
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LinkedIn Security Breach Triggers $5 Million Lawsuit

Class action lawsuit alleges that social network failed to protect users' data and didn't use industry standard protocols and technology.

LinkedIn is facing a $5 million class-action lawsuit over its information security practices, in response to an attacker who apparently obtained millions of the social network users' passwords.

That breach came to light earlier this month, after a hacker posted 8 million hashed passwords to a password-cracking forum on the InsidePro website. While 6.5 million of those passwords appeared to be from LinkedIn, another 1.5 million were traced to dating website eHarmony.

The complaint against LinkedIn was filed Monday in U.S. District Court in the Northern District of California for plaintiff Katie Szpyrka, a Chicago-based associate at a real estate firm, by the law firm of Edelson McGuire. According to court documents, Szpyrka registered with LinkedIn in late 2010, and paid extra--lately, $26.95 per month--to upgrade to a "premium" LinkedIn account. Currently, however, her LinkedIn profile lists zero connections.

[ CloudFare breach shows that companies need to pay attention to how their security systems are locked down. Read Attackers Turn Password Recovery Into Back Door. ]

The lawsuit frames the case against LinkedIn as a question of whether the company's security practices were adequate to protect its customers' personally identifiable information (PII), as the company had promised to do. "Through its Privacy Policy, LinkedIn promises its users that 'all information that [they] provide [to LinkedIn] will be protected with industry standard protocols and technology,'" reads the lawsuit. "In direct contradiction to this promise, LinkedIn failed to comply with basic industry standards by maintaining millions of users' PII in its servers' databases in a weak encryption format, and without implementing other crucial security measures."

The lawsuit suggests that LinkedIn "employed a troubling lack of security measures" evidenced by its reportedly being exploited via a SQL injection attack, as well as for failing to salt its passwords. "Industry standards require at least the additional process of adding 'salt' to a password before running it through a hashing function--a process whereby random values are combined with a password before the text is input into a hashing function. This procedure drastically increases the difficulty of deciphering the resulting encrypted password," read the lawsuit.

LinkedIn, which has been defending its security practices and leadership since the breach, Wednesday said that it was aware of the lawsuit. "We have recently learned that a class action lawsuit has been filed against the company related to the theft of hashed LinkedIn member passwords that were published on an unauthorized website," said Darain Faraz, a communications manager at LinkedIn, via email.

Expect LinkedIn to fight the lawsuit. "No member account has been breached as a result of the incident, and we have no reason to believe that any LinkedIn member has been injured," said Faraz. "Therefore, it appears that these threats are driven by lawyers looking to take advantage of the situation. We believe these claims are without merit, and we will defend the company vigorously against suits trying to leverage third-party criminal behavior."

What of the allegations leveled against LinkedIn in the class action lawsuit? "You knew it was coming," reported legal news blog LawyersandSettlements.com about the LinkedIn lawsuit. "Close to 6.5 million passwords get leaked and you know no one's gonna sit quietly and think 'all's well that end's well.' Uh-uh."

Did LinkedIn put every information security process into place that it had promised users? According to the lawsuit, the fact "that LinkedIn did not recognize its databases had been compromised until it was informed through public channels provides further evidence that the company didn't adhere to industry standards." But that point is open to debate. Notably, the FBI has said that its investigations often find evidence that businesses have been breached, and that the businesses are unaware until the bureau gives them a heads-up.

Security experts recommend not just salting passwords but also using a password algorithm to encrypt them rather than SHA1, which was the cryptographic algorithm employed by LinkedIn. But while that's what experts recommend, it's far from standard practice. For example, eHarmony and Last.fm, which were breached by the same attacker that hit LinkedIn, likewise used SHA1 and no salt.

LinkedIn is far from the first company to be on the receiving end of a lawsuit over alleged deficiencies in its information security practices. In a high-profile case, Sony in April 2011 was hit with a class action lawsuit for a security breach that came to light that month, which exposed personal information for up to 77 million customers of Sony's PlayStation Network (PSN).

After that class action lawsuit, Sony in September 2011 crafted a novel legal response: altering its PSN terms of service to prohibit users from filing class-action lawsuits against the company, The Register reported. "Any dispute resolution proceedings, whether in arbitration or court, will be conducted only on an individual basis and not in a class or representative action or as a named or unnamed member in a class, consolidated, representative or private attorney legal action," reads Sony's revised terms of service, to which all users had to agree before being allowed to use PSN.

More and more organizations are considering development of an in-house threat intelligence program, dedicating staff and other resources to deep inspection and correlation of network and application data and activity. In our Threat Intelligence: What You Really Need to Know report, we examine the drivers for implementing an in-house threat intelligence program, the issues around staffing and costs, and the tools necessary to do the job effectively. (Free registration required.)

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MROBINSON000
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MROBINSON000,
User Rank: Apprentice
6/28/2012 | 7:21:28 AM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
We agree with security expertsG point of view, which say that LinkedIn could have required a Password Policy in order to protect people from own password choice, without safety elements. Also, they could have added Salt or some other algorithms, such as PBKDF2 and bcrypt. We described in more detail what LinkedIn should have done with the passwords in the following blog article http://blog.securityinnovation...
Mathew
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Mathew,
User Rank: Apprentice
6/22/2012 | 9:44:52 AM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
Echoing the other comments, having one's password published (even hashed), and having someone then use the password, together with a username (which the attacker probably possesses) to *breach* the account are two separate issues.

But there's a bigger question here: How exactly did an attacker manage to grab a LinkedIn password database file--containing 6.5 million, and possibly many more passwords--without LinkedIn noticing?

Finally, the breach illustrates a big problem that "MyW0r1d" mentions: How can a company that primarily communicates with customers via email warn them that their password has been compromised, when those customers are being inundated with phishing attacks posing as email-reset warnings? Apparently, quite a few LinkedIn users are deleting the legitimate reset emails because they think it's spam/phishing.
Mathew
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Mathew,
User Rank: Apprentice
6/22/2012 | 9:40:36 AM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
Thanks everyone for your comments, great discussion. "Number 6" -- to your point "How is her having zero connections related to the security breach?" that's a very good question, and was a bit of a placeholder or "isn't this odd?" note to include in the piece, since it's very strange to find a LinkedIn account that has zero connections. MyW0r1d, I didn't mean to imply that she didn't have any friends. Again, just that it's odd to see someone who's elected to have zero connections.

I queried the law firm that filed the suit on the plaintiff's behalf about this, asking if the plaintiff had *had* multiple connections, and then dropped them in the wake of the security breach? Perhaps she feared that her account might be compromised, and bogus communications sent on her behalf? (I'm just guessing.) It's also possible that she needs to prove that she was a member of LinkedIn, and so maintained the account (even though there were no connections left on it) after filing the suit.

I haven't heard back from the law firm.
MyW0r1d
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MyW0r1d,
User Rank: Apprentice
6/21/2012 | 10:07:40 PM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
I don't know how I could confirm the compromise of a single account beyond doubt. I know I received a notice from LinkedIn about the "incident" and it looked so much like a phishing attempt I had to ask LinkedIn if it was for real. But being one of 6.5 million does not mean my account was accessed or manipulated (in fact, I didn't see any anomalies), just changed the password and went on. Not to defend the case, but SQL injection attacks are a common enough attack vector.
MyW0r1d
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MyW0r1d,
User Rank: Apprentice
6/21/2012 | 10:02:56 PM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
Agreed, are we supposed to feel sorry for her that almost two years after joining she has no links? It isn't Facebook and some use it simply as a static, online resume for job seekers.
moarsauce123
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moarsauce123,
User Rank: Ninja
6/21/2012 | 11:42:28 AM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
In all fairness, the accounts could have been compromised even without the breach. Just because the incidents are close together in time does not necessarily mean they are cause and effect, although it is possible.
jrandels342
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jrandels342,
User Rank: Apprentice
6/20/2012 | 10:25:09 PM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
It is interesting that they state "no member account has been breached" I know of at least three accounts within my associates that have had their accounts compromised as a result of this breach.
Number 6
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Number 6,
User Rank: Apprentice
6/20/2012 | 9:01:54 PM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
How is her having zero connections related to the security breach?

There's no indication in the filing that she suffered any harm. So where's the tort?
PJS880
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PJS880,
User Rank: Ninja
6/20/2012 | 5:23:00 PM
re: LinkedIn Security Breach Triggers $5 Million Lawsuit
I couldnGt agree with you more, in regards to the lawsuit. Absolutely large companies, who sole purpose is to manage thousands of userGs personal information, should be held liable for any and all damages that would have or could have occurred, due to the fact that security was not suitable for itGs a use. Just because memberGs accounts were directly breeched, that does not take away the significance of the initial breech, putting thousands of userGs information at risk.

I also like the fact that the author points out a key fact here; LinkedIn did not even know that their databases had been breached until it heard about them through third parties.

What? Are you serious? You canGt even tell if your databases have been breached and I am supposed to trust you with the securing my personal Information. You think LinkedIn would have learned a lesson to not follow in SonyGs footsteps, but with this breach it puts LinkedIn just as open to class action lawsuits. What do you think; do you think that Linkedin will rewrite it terms of service to avoid class action lawsuits, if a breach of this type occurs again? If at all this breach has brought about the vulnerabilities that the LinkedIn line of security lacks.

Paul Sprague
InformationWeek Contributor
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