VeriSign left executives and the public in the dark about breaches

The company that still maintains a large footprint in the Internet’s SSL market, and controls the root DNS for the .com, .net, and .gov domain space, was repeatedly attacked in 2010, resulting in at least one successful breach. Only, according to their statements to the SEC, those investigating the breach told no one, including the public and top company executives.

VeriSign’s security woes came to light after Reuters discovered them in a quarterly 10-Q filing with the U.S. Securities and Exchange Commission (SEC). Last October, the SEC released guidance to public corporations urging better disclosure when it comes to security incidents and investment risks.

While there are no disclosure requirements on the books that mention cybersecurity, registered companies “should disclose the risk of cyber incidents if these issues are among the most significant factors that make an investment in the company speculative or risky,” the SEC said.

According to the 10-Q filing, there were several attacks to VeriSign’s network in 2010, none of which were disclosed to the public. While the company does not believe that the root DNS servers were breached, they did confirm that information stored on the compromised corporate systems was exfiltrated. They did not disclose what the compromised data consisted of.

To make matters worse, the internal investigators applied “remedial measures” to address the problem, and withheld information about the incident from top executives. On top of that, the measures that were put in to place might not be enough to prevent similar attacks, the filing stated.

“The occurrences of the attacks were not sufficiently reported to the Company’s management at the time they occurred for the purpose of assessing any disclosure requirements. Management was informed of the incident in September 2011 and, following the review, the Company’s management concluded that our disclosure controls and procedures are effective. However, the Company has implemented reporting line and escalation organization changes, procedures and processes to strengthen the Company’s disclosure controls and procedures in this area,” the 10-Q outlines.

Commenting on the incident and subsequent disclosure, the CMO of LogLogic, Mandeep Khera, told The Tech Herald that the revelation was scary, because not only was VeriSign breached repeatedly, but their entire process broke down.

“Senior management wasn’t notified for a long time and the breach wasn’t disclosed publicly. This reinforces the point that most companies still have a very weak security infrastructure,” Khera said.

“If security companies like VeriSign can be breached repeatedly, you have to wonder what’s going on with all the other companies in the world. What’s also interesting is that breach notification regulations are bypassed in these cases, because senior management weren’t in the loop.”

For their part, VeriSign followed the SEC’s disclosure recommendations and acknowledged that the breach poses a risk to the company and investors.

“We retain certain customer information in our secure data centers and various registration systems. It is critical to our business strategy that our facilities and infrastructure remain secure and are perceived by the marketplace to be secure,” the 10-Q said.

“Despite our security measures, our infrastructure may be vulnerable to physical break-ins, computer viruses, attacks by hackers or nefarious actors or similar disruptive problems,” the company added.

If that were to happen, investors are warned, VeriSign could face “significant liability” and “customers could be reluctant to use our services.” Moreover, this type of situation “could adversely affect our reputation and harm our business.”

Perhaps they remained silent for that very reason, but in truth, no one will ever know why the internal IT staff dealing with the incident remained silent and didn’t bother to inform people internally, let alone the public.

Last year, after the attacks on Comodo and DigiNotar, it was assumed VeriSign walked away unharmed, and their SSL divisions wasted no time publicizing this and using it for sales pitches and marketing.

As it turns out, the only reason the public thought they were unharmed by the rash of large-scale attacks against major companies was that they withheld the information. In reality, VeriSign was the first, followed by DigiNotar, and then Comodo.

“This shouldn't surprise anyone,” said Rob Rachwald, director of security strategy at Imperva.

“We are seeing a rise in attacks which target the worldwide infrastructure that supports SSL. We expect these attacks to reach a tipping point in 2012, which, in turn, will invoke a serious discussion about real alternatives for secure web communications. The VeriSign attack highlights that the tipping point may have actually arrived in 2011.”

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