Incident: Cybersecurity Breaches at the U.S. Federal Reserve (2011-2015)

Published Date: 2016-06-01

Postmortem Analysis
Timeline 1. The software failure incident at the U.S. Federal Reserve, involving more than 50 cyber breaches between 2011 and 2015, occurred between 2011 and 2015 as reported in Article 44579 and Article 43946.
System 1. Federal Reserve's computer systems [Article 44579, Article 43946] 2. Fed's national team of cybersecurity experts [Article 44579, Article 43946] 3. National Incident Response Team (NIRT) [Article 44579, Article 43946]
Responsible Organization 1. Hackers or spies were responsible for causing the software failure incident at the U.S. Federal Reserve, as suspected by the central bank's staff [44579, 43946].
Impacted Organization 1. The U.S. Federal Reserve [Article 44579, Article 43946]
Software Causes 1. Malicious code used by hackers [44579, 43946] 2. Espionage acts involving software breaches [44579, 43946]
Non-software Causes 1. Lack of adequate scanning databases for vulnerabilities and putting enough restrictions on system access as highlighted in the 2015 audit by the Fed board’s Office of Inspector General [Article 44579, Article 43946].
Impacts 1. The software failure incident at the U.S. Federal Reserve led to more than 50 cyber breaches between 2011 and 2015, with several incidents described as "espionage," raising concerns about the security of the financial system and the confidentiality of monetary policy discussions [44579, 43946]. 2. The cybersecurity reports obtained through a Freedom of Information Act request were heavily redacted to keep secret the central bank's security procedures, indicating a breach of sensitive information and potential unauthorized access to critical data [44579, 43946]. 3. The incidents of hacking and espionage targeted the Fed's computer systems, which play a critical role in global banking and hold confidential information, posing a threat to the stability of the financial system [44579, 43946]. 4. The software failure incidents involved malicious code and espionage acts, with information being disclosed in some cases, highlighting the vulnerability of the Fed's systems to cyber threats [44579, 43946]. 5. The cybersecurity shortcomings identified by an internal watchdog, including inadequate scanning of databases for vulnerabilities and insufficient restrictions on system access, increased the risk of unauthorized disclosure and inappropriate use of sensitive board information, indicating a need for improved security measures [44579, 43946].
Preventions 1. Implementing robust cybersecurity measures such as regular security audits, vulnerability scanning, and access restrictions could have prevented the software failure incident [44579, 43946]. 2. Enhancing employee training on cybersecurity best practices and awareness to prevent phishing attacks and unauthorized access to sensitive information could have helped prevent the incident [44579, 43946]. 3. Utilizing advanced intrusion detection systems and monitoring tools to quickly identify and respond to potential cyber breaches could have mitigated the risk of software failure incidents [44579, 43946]. 4. Strengthening network segmentation and isolating critical information, such as discussions about monetary policy, from other systems to limit the impact of potential breaches could have been a preventive measure [44579, 43946]. 5. Collaborating with cybersecurity experts and organizations to stay updated on the latest threats and security trends, as well as sharing information on potential vulnerabilities, could have helped prevent the software failure incident [44579, 43946].
Fixes 1. Implementing stronger cybersecurity measures to protect the Federal Reserve's computer systems from future cyber breaches [44579, 43946]. 2. Conducting regular vulnerability scans on databases and enforcing stricter restrictions on system access to prevent unauthorized disclosure of sensitive information [44579, 43946]. 3. Enhancing monitoring and detection capabilities to identify and respond to hacking attempts promptly [44579, 43946]. 4. Increasing cybersecurity training and awareness among staff to prevent incidents like sending sensitive information to wrong recipients [44579, 43946]. 5. Collaborating with cybersecurity experts and agencies to strengthen defenses against cyber threats and espionage attempts [44579, 43946].
References 1. Federal Reserve records 2. Cybersecurity reports 3. Freedom of Information Act request 4. Interviews with cybersecurity experts 5. Former Fed cybersecurity staffers 6. Audit by the Fed board’s Office of Inspector General

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident having happened again at one_organization: - The Federal Reserve detected more than 50 cyber breaches between 2011 and 2015, with several incidents described internally as "espionage" [Article 44579]. - In eight information breaches between 2011 and 2013, Fed staff wrote that the cases involved "malicious code," referring to software used by hackers [Article 44579]. - Four hacking incidents in 2012 were considered acts of "espionage," according to the records [Article 44579]. (b) The software failure incident having happened again at multiple_organization: - Cyber thieves have targeted large financial institutions around the world, including America’s largest bank JPMorgan, as well as smaller players like Ecuador’s Banco del Austro and Vietnam’s Tien Phong Bank [Article 44579]. - Hacking attempts were cited in 140 of the 310 reports provided by the Fed’s board, indicating a widespread issue across various organizations [Article 44579].
Phase (Design/Operation) operation (a) The articles do not provide specific information about a software failure incident related to the design phase, where contributing factors are introduced by system development, system updates, or procedures to operate or maintain the system. (b) The articles mention incidents related to the operation phase, where contributing factors are introduced by the operation or misuse of the system. The incidents reported involve cyber breaches at the U.S. Federal Reserve between 2011 and 2015, suspected to be caused by hackers or spies. The breaches involved espionage and malicious code, indicating failures in the operation of the Fed's computer systems [44579, 43946].
Boundary (Internal/External) within_system, outside_system (a) within_system: The software failure incident related to the Federal Reserve cyber breaches between 2011 and 2015 involved factors originating from within the system. The incidents included cases of "malicious code" used by hackers [44579, 43946]. The Fed's national team of cybersecurity experts identified 51 cases of "information disclosure" involving the Fed's board, indicating breaches within the system [44579, 43946]. Additionally, the National Incident Response Team (NIRT) created incident reports to address software vulnerabilities within the system [44579, 43946]. (b) outside_system: The software failure incident was also influenced by factors originating from outside the system. The incidents involved suspected hackers or spies targeting the Fed's computer systems from external sources [44579, 43946]. The breaches were part of cyber-attacks on the Fed, indicating external threats to the system [44579, 43946]. The incidents of espionage could involve foreign governments or private entities attempting to gain unauthorized access to Fed information [44579, 43946].
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident occurring due to non-human actions: - The articles mention that there were 51 cases of "information disclosure" involving the Fed's board, which could include unauthorized access to Fed information through hacking attacks or other non-human actions [44579, 43946]. - In some incidents, the cases involved "malicious code," referring to software used by hackers, indicating a non-human factor contributing to the failure [44579]. - The articles also highlight that the Fed's national team of cybersecurity experts identified cases of "information disclosure," which could involve breaches caused by non-human actions such as cyber-attacks [44579, 43946]. (b) The software failure incident occurring due to human actions: - The articles mention that espionage incidents could involve spying by individuals like British activist Lauri Love, who infiltrated a server at a regional Fed branch in 2012, indicating human actions contributing to the failure [44579, 43946]. - It is noted that the Fed was under constant assault and compromised frequently, suggesting that human actions, such as inadequate cybersecurity measures or vulnerabilities introduced by employees, could have played a role in the software failure incidents [44579, 43946]. - An internal audit criticized the central bank for cybersecurity shortcomings, indicating potential human actions contributing to the failure, such as inadequate scanning of databases for vulnerabilities or insufficient restrictions on system access [44579, 43946].
Dimension (Hardware/Software) software (a) The articles do not provide specific information about a software failure incident occurring due to hardware-related contributing factors. (b) The software failure incidents mentioned in the articles are primarily related to cybersecurity breaches, hacking attempts, and espionage activities targeting the Federal Reserve's computer systems. These incidents involve malicious code, espionage acts, information disclosure, and hacking attempts, indicating failures originating in software vulnerabilities and security weaknesses [44579, 43946].
Objective (Malicious/Non-malicious) malicious, unknown (a) The articles mention incidents involving "malicious code" used by hackers in eight information breaches between 2011 and 2013 [44579, 43946]. Additionally, four hacking incidents in 2012 were considered acts of "espionage," with information being disclosed in at least two of those incidents [44579, 43946]. These incidents suggest a malicious intent to harm the system by unauthorized access and disclosure of information. (b) The articles do not provide specific examples or details of non-malicious software failure incidents.
Intent (Poor/Accidental Decisions) unknown The articles do not provide specific information about the intent of the software failure incident in terms of whether it was due to poor decisions or accidental decisions. The focus of the articles is on cybersecurity breaches and espionage activities targeting the Federal Reserve, with an emphasis on hacking incidents and information disclosure. Therefore, it is unknown whether the software failure incidents were a result of poor decisions or accidental decisions based on the information provided in the articles [44579, 43946].
Capability (Incompetence/Accidental) accidental (a) The articles do not provide specific information about the software failure incident occurring due to development incompetence. (b) The software failure incidents reported in the articles were primarily due to cyber breaches and hacking attempts, indicating failures introduced accidentally by external malicious actors rather than by development incompetence [44579, 43946].
Duration unknown The articles do not provide specific information about the duration of the software failure incident related to the cybersecurity breaches at the Federal Reserve. The incidents mentioned in the articles primarily focus on cyber breaches and espionage activities targeting the Fed's computer systems, but they do not specify whether the failures were permanent or temporary. Therefore, it is unknown whether the software failure incidents were permanent or temporary based on the information provided in the articles [Article 44579, Article 43946].
Behaviour omission, other (a) crash: The articles do not specifically mention a software failure incident related to a crash where the system loses state and does not perform any of its intended functions. (b) omission: The articles mention incidents where the Fed's computer systems were breached by hackers, leading to information disclosure. In some cases, information was disclosed, while in others, it was unclear whether there was a breach, indicating an omission in the system's intended function to protect sensitive information [44579, 43946]. (c) timing: The articles do not mention a software failure incident related to timing, where the system performs its intended functions correctly but too late or too early. (d) value: The articles do not mention a software failure incident related to value, where the system performs its intended functions incorrectly. (e) byzantine: The articles do not mention a software failure incident related to a byzantine behavior, where the system behaves erroneously with inconsistent responses and interactions. (f) other: The behavior of the software failure incident in this case involves security breaches and information disclosure due to hacking attempts, espionage, and malicious code, indicating a failure in the system's security mechanisms [44579, 43946].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property, theoretical_consequence (d) property: People's material goods, money, or data was impacted due to the software failure The software failure incident at the U.S. Federal Reserve involved cyber breaches between 2011 and 2015, with several incidents described as "espionage." The Fed's computer systems hold confidential information on discussions about monetary policy that drives financial markets. The records do not specify whether hackers accessed sensitive information or stole money, but the incidents were considered acts of espionage, and information was disclosed in some cases [44579, 43946].
Domain finance (a) The failed system was related to the finance industry, specifically affecting the U.S. Federal Reserve's computer systems that hold confidential information on discussions about monetary policy that drives financial markets [Article 44579, Article 43946]. (h) The software failure incident was directly linked to the finance industry, as the Federal Reserve's cybersecurity was compromised by cyber breaches, including incidents of espionage, which could potentially impact the stability of the financial system [Article 44579, Article 43946].

Sources

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