A New Shakespearean Tragedy?

Once more unto the breach, dear friends, once more;
Or close the wall up with our English dead.

KING HENRY V

In Shakespeare’s retelling of the life of King Henry V, he has the king urging his brave soldiers forward once more, hurling themselves against the French army in the early stages of what became the decisive battle of Agincourt.  The line has survived to become a common exhortation for giving something another try. One notes that King Henry did offer the alternative of dying in the gap of the wall, but the essential idea is to flow through the breach to victory.

Today we are dealing with a breach in which the flow is outbound, and there is no victory in sight.  The massive date breach suffered by Equifax has exposed the personal identifying information of over 143 million people. The attackers took people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000.  The breach is rightly seen as a monumental failing on the part of Equifax, and the repercussions are mounting rapidly.

Writing on the Gartner Blog Network, John Wheeler calls the breach a game changer for cybersecurity.   Among his predictions, Equifax will cease to exist. “In the last 4 business days since the company disclosed the data breach Equifax has suffered a $5.3 billion loss in market capitalization which represents almost a third of the company’s total value. When considering an estimate of the potential costs associated with the data breach (based on the 2017 IBM/Ponemon Institute Cost of Data Breach Study), Equifax faces a potential loss of $20.2 billion which currently exceeds their total market value by $8.3 billion. Also, the company currently faces more than 23 class actions lawsuits with at least one seeking more than $70 billion in damages. The death spiral will soon take on greater momentum when executives are required to testify before Congress and criminally investigated for potential insider trading related to the delayed disclosure of the data breach. Equifax will ultimately be acquired out of bankruptcy by one of the remaining two credit reporting companies – TransUnion or Experian.”

The “delayed disclosure” noted by Wheeler is extremely problematic. Equifax said it first detected suspicious behavior on July 29. It appears the breach dates back to May of this year, and some reports suggest it may have happened even earlier. Even if one accepts the July 29 date as the first instance in which Equifax became aware of the breach, several weeks went by before customers were made aware. The delay triggered outrage, and credit reporting companies have few friends, so the fury goes on unabated.

The fallout continues. Equifax’s Chief Information Officer and Chief Security Officer “retired,” and its CEO stepped down. More heads will likely roll. Forty states are investigating how Equifax handled the breach. Other regulatory agencies are launching investigations, and there is a real possibility that this breach will lead to significant change in law and regulation.

Once more, out through the breach.

By Tom Davis, SDI Cyber Risk Practice

September 26, 2017

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