Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Attacks/Breaches

5/23/2019
06:20 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Moody's Outlook Downgrade of Equifax: A Wake-up Call to Boards

The move provides another spark to light a fire under CISOs to improve how they measure and communicate security risks to the board, security experts say.

Wall Street has been abuzz this week over drastic measures by credit ratings agency Moody's to downgrade its rating outlook of Equifax, with expensive data breach fallout named as a major factor for the poor marks. While the action was not unexpected, the landmark nature of the outlook should provide some needed emphasis to both boards of directors and CISOs of the modern business imperative for cyber resilience, security and risk experts say.

"Today's news puts a punctuation mark on the business reality of cybersecurity risks," says Kevin Bocek, vice president of security strategy and threat intelligence at Venafi, who believes this is going to push more boards to take in increasingly active role in understanding and managing cybersecurity risks. "They definitely need to do more than ask the CISO some high-level questions. Equifax is in the hot seat now, but most of the Fortune 500 CEOs and CISOs would do no better in the same situation."

CNBC broke the news last night of the note from Moody's changing its rating outlook that cited the $690 million in breach expenses — including costs for settling mounting class action lawsuits — and increased need for infrastructure investments to be made by the company through 2020 to address systemic cybersecurity weaknesses found in post-breach scrutiny.

Joe Mielenhausen, a Moody's spokesperson, told CNBC that "this is the first time the fallout from a breach has moved the needle enough to contribute to the change" in ratings outlook.

Equifax's record-breaking data breach, first disclosed in September 2017, was eventually found to have exposed the information of 147.9 million people. Technically the exposure was triggered through the exploitation of an unpatched Apache Struts vulnerability, but security industry experts and government officials say that more serious organizational problems and lack of executive oversight were the true culprit of what Congress called an "entirely preventable" breach. 

The fallout from the breach included the ouster of Equifax's CISO and eventually its CEO, and the company is still feeling the effects of class action suits from consumers and shareholder derivative lawsuits

"This is Moody's delivering on their intent last November to take cyber risk into account when grading companies," says Steve Durbin, managing director of the Information Security Forum. "This will certainly send a clear message to boards in a language that they understand that cyber risk is integral to business risk and that the implications of a breach or loss of data can have very real impact." 

Durbin says he's been advocating for some time to both the insurance industry and credit rating agencies to take cyber risk into account as they set policy pricing and assess company value. He believes this action by Moody's will set the tone for assessment of business health in the future.

"Moving forward, this should become the norm since cyber risk is so integral to business risk that an assessment of business health without taking cyber risk and a company’s resilience into account will become meaningless," he says.

Indeed, CNBC reported that Moody's hinted as such in its Equifax note, stating that it will increasingly scrutinize cybersecurity "for all data oriented companies" in the future.

Security insiders say that this Moody's action should not only be a wake-up call to CEOs and boards, but it's also a crucial inflection point for CISOs.

According to Laurence Pitt, security strategy director at Juniper Networks, it's another "chance in conversation" for security leaders — one that they shouldn't blow by lacking the right data or insights about organization-wide cyberrisk. 

"This incident changes how business will look at cybersecurity, so cybersecurity needs to change how it talks to business," he says.

Related Content: 

Ericka Chickowski specializes in coverage of information technology and business innovation. She has focused on information security for the better part of a decade and regularly writes about the security industry as a contributor to Dark Reading.  View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Threaded  |  Newest First  |  Oldest First
REISEN1955
100%
0%
REISEN1955,
User Rank: Ninja
5/28/2019 | 8:45:14 AM
One Lone Individual
How many place this into context of CEO testimony before Congress (slightly serious indeed) where he claimed it was ALL the fault of just one (1) security enginer, read that IT drone unit, who failed to perform a patch on a system.  WOW, THAT EASY?   Showed immense deaf and blind attitude by management and board and so this article SHOULD be read inlight of that horrendous judgment.  Oh, why is all the flak flying here?  Just one guy?  Hey, the CEO said so - it must be true, right?  
Mobile Banking Malware Up 50% in First Half of 2019
Kelly Sheridan, Staff Editor, Dark Reading,  1/17/2020
Exploits Released for As-Yet Unpatched Critical Citrix Flaw
Jai Vijayan, Contributing Writer,  1/13/2020
Microsoft to Officially End Support for Windows 7, Server 2008
Kelly Sheridan, Staff Editor, Dark Reading,  1/13/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: This comment is waiting for review by our moderators.
Current Issue
The Year in Security: 2019
This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
Flash Poll
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
[Just Released] How Enterprises are Attacking the Cybersecurity Problem
Organizations have invested in a sweeping array of security technologies to address challenges associated with the growing number of cybersecurity attacks. However, the complexity involved in managing these technologies is emerging as a major problem. Read this report to find out what your peers biggest security challenges are and the technologies they are using to address them.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-7227
PUBLISHED: 2020-01-18
Westermo MRD-315 1.7.3 and 1.7.4 devices have an information disclosure vulnerability that allows an authenticated remote attacker to retrieve the source code of different functions of the web application via requests that lack certain mandatory parameters. This affects ifaces-diag.asp, system.asp, ...
CVE-2019-15625
PUBLISHED: 2020-01-18
A memory usage vulnerability exists in Trend Micro Password Manager 3.8 that could allow an attacker with access and permissions to the victim's memory processes to extract sensitive information.
CVE-2019-19696
PUBLISHED: 2020-01-18
A RootCA vulnerability found in Trend Micro Password Manager for Windows and macOS exists where the localhost.key of RootCA.crt might be improperly accessed by an unauthorized party and could be used to create malicious self-signed SSL certificates, allowing an attacker to misdirect a user to phishi...
CVE-2019-19697
PUBLISHED: 2020-01-18
An arbitrary code execution vulnerability exists in the Trend Micro Security 2019 (v15) consumer family of products which could allow an attacker to gain elevated privileges and tamper with protected services by disabling or otherwise preventing them to start. An attacker must already have administr...
CVE-2019-20357
PUBLISHED: 2020-01-18
A Persistent Arbitrary Code Execution vulnerability exists in the Trend Micro Security 2020 (v160 and 2019 (v15) consumer familiy of products which could potentially allow an attacker the ability to create a malicious program to escalate privileges and attain persistence on a vulnerable system.