8 Lessons From Nortel's 10-Year Security Breach

Learn from Nortel's missteps. Security experts warn that more businesses have been hit by ongoing, difficult to detect exploits.

Mathew J. Schwartz, Contributor

February 17, 2012

5 Min Read

Anonymous: 10 Facts About The Hacktivist Group

Anonymous: 10 Facts About The Hacktivist Group

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It is every corporate security manager's worst nightmare.

News surfaced this week that Nortel's network was hacked in 2000, after which attackers enjoyed access to the telecommunications and networking company's secrets for 10 years.

The intrusions reportedly began after attackers used passwords stolen from the company's CEO, as well as six other senior executives, together with spyware. By 2004, a Nortel employee did detect unusual download patterns associated with senior executives' accounts, and changed related passwords. The security team also began watching for signs of suspicious activity, but apparently stopped doing so after a few months. The full extent of the breach wasn't discovered until 2010, by which time hackers had been accessing Nortel secrets--from technical papers and business plans, to research reports and employees' emails--for nearly a decade.

"This is a clear case of a total failure of an information security program and should be a wakeup call for other corporations," said Chris Mark, principal of the Mark Consulting Group, on the Global Security & Risk Management blog.

What should Nortel have done differently, and what can information security professionals learn from this example?

1. Don't Treat Nortel As The Exception. If there's one takeaway from the Nortel breach, it's that the advanced persistent threat is alive and well. "One of the main goals of the so-called APT is in fact its persistence. During recent years we have been seeing a lot of companies publicly reporting breaches, and the number is increasing steeply," said Jaime Blasco, manager of AlienVault Labs, via email. Without a doubt, data breaches now seem so common as to be banal. But what if APTs are just as prevalent, yet even less frequently spotted?

2. Keep Proving You're Not Nortel. Unfortunately, "low and slow" attacks that keep a low profile--so as to facilitate long-term data theft--are extremely difficult to detect, and thus tough to stop. "Although Nortel is in the headlines, this type of attack could be occurring undetected at other companies," said Mike Logan, president of Axis Technology, via email. Accordingly, businesses need to ensure that they have the right policies and procedures in place to help block such attacks, as well as to spot them when they happen.

3. Create A Robust Information Security Program. Blocking low-and-slow attacks requires a robust information security program, backed by the right technology. "Organizations need to ensure they have the proper tools at the perimeter and within their networks, and aggressive monitoring to detect outbound traffic and suspicious activity in the event of a breach," said Neil Roiter, director of research for Corero Network Security, via email. "The Aurora attacks, the RSA breach, and others demonstrate that Fortune 500 companies and other large enterprises are under constant threat from nation states such as China seeking shortcuts to technological advances."

4. Expect Defenses To Fail. Still, an information security program won't be completely effective all of the time. "Nowadays companies spend a lot of money placing prevention mechanisms such as antivirus, intrusion prevention systems, firewalls, and so on. When you are dealing with targeted attacks, these systems will eventually fail," said AlienVault's Blasco. "You often need a dedicated team that monitors the network and systems with advance tools to detect persistent and advanced threats. Companies should accept that they can be compromised and [invest in] detection and forensic tools and processes."

5. Don't Fail To Investigate Data Breaches. One of Nortel's errors was underestimating attackers, and how they might have gained ongoing access to the corporate network. "Had Nortel done an extended search for malicious activity, it would have found the points of malicious activity, which allowed the hackers access for an additional six years," said Axis Technology's Logan. Perhaps, but then even security giant Symantec recently said that it hadn't realized that attackers had stolen some of the code base for its flagship Norton AntiVirus during a 2006 breach. Obviously, data breach investigations aren't easy.

6. Conduct A Thorough Forensic Analysis. Likewise, don't expect breach investigations to be cheap. But short-term savings--skimping on conducting a thorough forensic analysis after a breach, for example--can have long-term repercussions, as Nortel discovered. "The ultimate irony is that the reason that most companies do not complete extended breach scans is the price, which the CEOs and CFOs are reluctant to green-light," said Logan. "However, if one looks at the financial and other fallout from this type of breach--fines, compliance issues, loss of customer trust, and damage to the brand--this type of intensive breach prevention makes sense."

7. Expect Greater Accountability Nortel executives notably failed to disclose the breach, even to potential buyers of the company or its assets. But according to Corero's Roiter, "We expect that the new SEC guidelines will result in more disclosures, such as the recent revelation of the VeriSign breach in 2010." Notably, VeriSign's SEC filing revealed that the company had suffered a data breach that may have compromised critical information relating to the Internet's domain name system. Accordingly, executives who want to avoid having to report these types of breaches should invest in "aggressive monitoring to detect outbound traffic and suspicious activity in the event of a breach," he said.

8. Defend Against More Than China. Was the attack against Nortel executed by someone with ties to China? That's possible, but for corporate information security programs, does the answer even matter? "It's very hard to prove a Chinese involvement. Yes, the data might have been transmitted to an IP address based in Shanghai, but it is possible that a computer in Shanghai has been compromised by, say, a remote hacker in Belgium," said Graham Cluley, senior technology consultant at Sophos, in a blog post "But let's not be naive. Of course, there are Chinese hackers. But there are also British hackers, and South African hackers, and Canadian hackers, and Italian hackers," he said. In other words, anyone from nation states to malicious insiders could be trying to steal your business's data. Be prepared.

About the Author(s)

Mathew J. Schwartz


Mathew Schwartz served as the InformationWeek information security reporter from 2010 until mid-2014.

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