Online payments group PayPal announced Tuesday it was acquiring Israeli cybersecurity firm CyActive and establishing a new security hub in Israel.

The terms of the deal were not announced, but some reports this week said PayPal, which is being spun off by online giant eBay, was paying $ 60 million for CyActive.

“Our goal is to extend our global security leadership, and bolster our efforts in predictive threat detection and prevention,” said PayPal chief technology officer James Barrese in a blog post.

“The acquisition of CyActive will bring great talent and immediately add ‘future-proof’ technology to PayPal’s world-class security platform. With CyActive, we’ll have even more ways to proactively predict and prevent security threats from ever affecting our customers.”

The move comes with the finance sector increasingly under attack from hackers. In recent months, major companies have disclosed data breaches affecting tens of millions of customers, with credit card or financial information leaked in some cases.

CyActive, which launched in 2013, specializes in “predictive cybersecurity,” or heading off online attacks before they happen.

The company’s website claims it has “an unprecedented ability to automatically forecast the future of malware evolution, based on bio-inspired algorithms and a deep understanding of the black hats’ hacking process.”

Online retail giant eBay unveiled plans last September to spin off PayPal, aiming to help the unit compete better in the fast-moving online payments segment.

According to eBay, PayPal facilitates one in every six dollars spent online today.

And PayPal has moved into mobile payments with the acquisition of the payment processing group Braintree, boosting its own mobile platform called OneTouch.

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Even as cyber-threats circulate, the boards of directors at many enterprises continue to remain out of the loop when it comes to security.

A new study from the Ponemon Institute found that 78 percent of the more than 1,000 CIOs, CISOs and senior IT leaders surveyed had not briefed their board of directors on cyber-security in the last 12 months. In addition, 66 percent said they don’t believe senior leaders in their organization consider security a strategic priority.

The findings follow a recent survey from the National Association of Corporate Directors (NCD) that found that more than half (52 percent) of the 1,013 corporate directors surveyed were not satisfied with the amount of information they were receiving about cyber-security. In addition, 36 percent said they were unsatisfied with the quality of that information.

“For a long time IT issues were seen by Boards of Directors as jammed printers and computer crashes,” said Michael K. Daly, CTO of Raytheon’s cyber-security business. “Showing the threat to brand and reputation – and ultimately shareholder value – has taken time. The Global Megatrends Survey showed that only 22 percent of respondents have briefed the board on the organization’s cyber-security strategy in the past 12 months and only 21 percent of say the board actually requested a briefing. In fact, one of the driving factors behind Raytheon’s desire to do this study was to elevate the information security point of view into the C-suite.”

One of the best ways to communicate with the boardroom is by reporting simple metrics that matter to the business, said Daly.

“Telling a board how many times a firewall blocked an attack doesn’t mean anything – they are left to wonder if it is good or bad that we are seeing attacks,” he said. “At Raytheon we report one number, dwell-time – the amount of time an attacker is able to use a computer before being stopped. Our goal is to keep that number as close to zero as possible by preventing their ability to communicate, move or do harm. For our board members, the trending of that one number allows them to determine the company’s exposure to risk and whether the right investments are being made, whether it is in analytics, talent, employee training, or new tools.”

Less than half of the respondents believe their organizations take appropriate steps to comply with leading cyber-security standards, and just 47 percent said their organizations have sufficient resources to meet cyber-security requirements.

Still, the majority of respondents believe their cyber-security postures will improve due to the following reasons: cyber intelligence will become more timely and actionable, more funding will be made available to invest in people and technologies, technologies will become more effective in detecting and responding to cyber threats, more staffing will be available to deal with the increasing frequency of attacks and employee-related risks will decline.

“High-profile cyber-security breaches are closing the gap between CISOs and CEOs by forcing meaningful security discussions into corner offices and boardrooms,” said Larry Ponemon, chairman and founder of Ponemon Institute, in a statement. “In the meantime, our study found there is still a large delta between resources and needs, as security leaders lack both funding and manpower to adequately protect assets and infrastructure.”

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During the White House Summit on Cybersecurity and Consumer Protection at Stanford University on Friday, President Barack Obama signed an executive order to promote cybersecurity information sharing between private sector companies and the U.S. Government.

The executive order, signed by the President on stage after addressing a large audience, outlines an information sharing framework that would help companies work together, along with the federal government, to more effectively identify and protect against cyber threats.

“This has to be a shared mission,” Obama said during his speech. “So much of our computer networks and critical infrastructure are in the private sector, which means government cannot do this alone. But the fact is that the private sector can’t do it alone either, because it’s government that often has the latest information on new threats.”

Overall, industry professionals applauded the steps by the White House, but indicated this is just a small step in addressing serious threats. An executive order can only go so far and more is needed than just information sharing to combat sophisticated cyber attacks, experts said.

And the feedback begins…

Phil Smith, SVP of Government Solutions and Special Investigations at Trustwave:

“The President’s remarks at today’s summit are a great beginning, especially when he explained today’s threat landscape as a ‘cyber arms race.’ That statement is significant because it puts organizations and individuals on notice that cybersecurity is a national security and public safety issue. Sharing threat intelligence across government agencies, law enforcement and the private sector is a critical component of strengthening data protection however it will not work without safe harbor protections for companies that participate.

An executive order can only go so far. It takes Congressional action to mandate information sharing on a national level that includes liability protection. Without that protection, we will not see the level of participation required for information sharing to be successful.

When organizations share information they produce actionable threat intelligence that helps them stay ahead of the criminals and build defenses to block their next move.”

 Ken Xie, CEO of Fortinet:

“During the White House’s Cybersecurity Summit, there was a lot of great discussion around information sharing. The biggest obstacle is that our industry is extremely shorthanded: it’s estimated we can only fulfillne in every 20 technology positions needed in the cybersecurity space. Who will mitigate the threat? Where and who are the cyber swat teams? Who will train the responders? Answers to these questions remain unanswered, though the conversation is a step in the right direction.”

Nate Fick, CEO of Endgame:

“Much of the talk in the room is about information sharing. In security, the advantage often goes to the team with better, more usable data. So any steps to encourage faster sharing are meaningful progress.”

Tomer Weingarten, CEO of SentinelOne:

“Information sharing is a good start. However, it needs to be handled in a way that preserves the privacy of affected organizations and prevents data from being “leaked”. In the wrong hands, this intelligence would let attackers know that their operation has been compromised, could reveal attack binaries that can be re-used and expose companies that have been breached which may lead to more attacks against them. Also, sharing data and intelligence will do little to mitigate carefully crafted attacks since they often do not demonstrate any previously seen indicators.”

Mike Brown, VP and GM Public Sector for RSA:

“It isn’t just information sharing that is needed. We have some valuable avenues to share information. What we need is liability relief and clarity about the type and format of information that needs to be shared. That is also critical so that information that is shared is actually actionable.”

Tal Klein, CMO for Adallom:

“The fact that the President is addressing the issues of cyber security is a good thing – we definitely need more awareness. That stated, I am less excited about specific directives that may offset the financial incentive for companies to be in the business of cyber security. Information sharing is good, but if a security company makes their money researching threats and then is expected to turn over their research to the public domain as soon as its complete, then the value of that research diminishes.

 

I don’t think the government should be in the business of regulating the information security industry. What I suspect is that we are close to the age of the “cyber lobby” (dare I say “cyber subsidies”) – and I’m not sure that will benefit anyone other than the companies that pay to influence policy. So, I would prefer the President’s agenda would begin and end with “awareness” and avoid tinkering with the economic  dynamics of the information security market.”

Ivan Shefrin, VP of Security Solutions at TaaSera:

“Voluntary sharing of cybersecurity intelligence can be an important step – provided it’s accompanied by appropriate liability and privacy constraints. The benefits are clear: last year’s United Parcel Service breach was in fact discovered as a direct result of threat intelligence sharing between the government and private sector.

 

Sharing cyber intelligence can have a positive impact if information sharing is made actionable. To accomplish this, security professionals should assume they’re already compromised, and implement policies, tools and budgets to balance breach prevention with pre-breach detection and response.”

Marc Gaffan, CEO & Co-Founder of Incapsula:

“President Obama is taking a bold stance be visiting with tech companies in silicon valley this week to talk about his proposed cybersecurity legislation, right on the heels of his cybersecurity agency announcement earlier this week. In the past, the sale and use of botnets, which have the potential to overwhelm a site or network with malicious activity, was surrounded by legal ambiguities and grey areas. Obama’s new legislation removes all ambiguity so for the first time companies can prosecute the so-called “bot-herders” that try to do them harm.”

Ron Gula, CEO, Tenable Network Security:

“It’s important to applaud this administration for its attention to cyber security. It’s been long overdue and at the rapid pace technology is evolving, we are already behind the curve. Executive orders such as this, while not a substitute for good security practices, raise awareness for the need to invest more heavily when it comes to cyber security.

Information sharing won’t solve the bigger problems we face in the industry, but it’s a good place to start. Everyone in IT is realizing the scale and saving from centralizing command and control. Once consolidated, the information shared will provide greater context, allowing for organizations to be more agile in mitigating sophisticated attacks.”

Ryan Shaw, Director of Research and Development at Foreground Security:

“The President’s intention to issue an Executive Order (EO) promoting government and private sector cybersecurity information sharing is an important acknowledgement of the current deficiencies in our country’s current cybersecurity defense capability. Unfortunately, EOs and new agencies will not be able to resolve the sharing challenges that have existed for years.  These challenges include:

· Lack of trust between the parties involved

· COTS cybersecurity tools (e.g. SIEM, NSM, Web Proxies, ID/PS, Next-gen Firewalls) that are ill-equipped to deal with large quantities of multi-source, non-normalized threat indicators

· Shortfall of skilled cyber-threat analysts or source-agnostic platforms to manage the deluge of threat indicators

· Multiple sharing vehicles and taxonomies (these are a portion of the Voluntary Standards for ISAOs that the President will speak of)”

John Dickson, principal at software security firm Denim Group:

 “There is no mention of increased liability protection for companies in the today’s briefing sheet.  Absent of increased protection, or at least clarity, for the corporate liability question will likely result in a lukewarm reception from industry.  Couple that with remaining post-Snowden doubts that remain over working with government and law enforcement, then you have a potential non-starter here.

The focus on strong privacy and civil liberty protections misses the point here – that’s not hurdle in more information sharing, liability protection is. Cooperation with the Congress is an imperative. My contacts in the US Capitol say these initiatives are coming out with little consultation with Congress, which also brings up the question of the measures’ ultimate implementation.”

Jeff Williams, CTO, Contrast Security:

 “I’m encouraged by all the talk about public-private partnerships that bring security to the forefront for government, large businesses, small businesses, and consumers. The panelists were right about the problems of speed and scale that cybersecurity involves.  I was thrilled to see that there is awareness of the complexity and importance of the problem at the highest levels of government and business.

 

However, the overwhelming theme of the summit was that the way forward is to focus on the threats and that communication will enable us to stop attacks.  I have serious doubts as to whether chasing the threat will have any effect whatsoever – the attribution problem is so significant in cyberattacks that after months we still have no resolution to the Sony attack, much less Anthem or others.

The worst part is that spending all this effort chasing our tails takes away from time we should be focused on building secure code and strong defenses. The fact that we are still producing code with SQL injection after almost two decades is embarrassing. The government can and should play a role in encouraging the software market to produce secure code. But with a confusing patchwork of agencies, agendas, and responsibilities, government has fallen far behind the financial industry in their ability to secure their own house.”

Jason Lewis, Chief Collection and Intelligence Officer of Lookingglass Cyber Solutions:

 “The White House is pushing a lot of recommendations that don’t seem to have gone through a vetting process by experienced technologists. The effort to weaken encryption will ultimately have the opposite of the desired effect. There are new rules that impact security researchers and will lead to less secure systems, because it will be illegal for researchers to test those systems.

 

The positive results will be the increased visibility and discussion about these issues. For me, if the US government really wanted to improve security they would be at the forefront of data sharing and making it easier for researchers to contribute, not harder.”

Dan Waddell, Director of Government Affairs, (ISC)2:

“It’s important that the American public put this issue into perspective.  As mentioned by Lisa Monaco, the White House’s top aide for counterterrorism and homeland security, the cyber threat is becoming more diverse, sophisticated and dangerous. The actions of cyber attackers, while seldom seen played out online, are potentially as egregious on many different levels including economically, militarily, and in regards to the public’s day-to-day safety.

Overall, I think it’s a positive sign that we’re having these discussions at the highest levels of both the public and private sectors as well as academia.  CEOs, CISOs, government leaders and educators are all saying the same thing – cybersecurity is an absolute necessity to help protect our nation’s interests. It has an impact on every aspect of our lives – from homeland security, to defense, to the economy, to energy and critical infrastructure, to health, etc.  Everyone shares a common interest: We need to secure information of the people, for the people.”

Chris Wysopal, CTO & co-founder at Veracode:

 “The challenge for the tech industry is they need to retain the trust of their users or they can’t grow their businesses which require more and more intimate data be stored and processed by them.  That is why after many years of security professionals complaining of the lack of SSL usage by majo7r tech companies it wasn’t until the Snowden revelations that it was finally enforced by the big players.  

 

“The federal government has to convince the people using Google, Yahoo, Apple, etc., not the executives from those companies, that their data is safe from wholesale snooping or the information sharing they want is going to be a struggle.” 

Ken Westin, Security Analyst Tripwire:

“This Order and the informatPion sharing initiatives are a step in the right direction, however the challenge will be in the implementation where citizens’ privacy and civil liberties are protected, as well as making any intelligence gathered through these initiatives relevant and actionable for government agencies as well as private industry. In order to make these initiatives effective, secure and manageable, will require strong oversight and properly allocated resources to implement, not just initially, but also over the next few years as the program evolves. There needs to be constant vigilance and review of processes, data collected and effectiveness of the program in order to ensure agencies do not overreach and that the program itself remains useful to industry and agencies alike.

The devil is truly in the details, although I believe the spirit and intentions of the Order is good, it will be critical that there is transparency and oversight regarding its implementation. The government is breaking new ground and it is important to tread carefully, as there is a lot to learn in the process of developing a system of this scale and depth. I sincerely hope that the government will be involving not just law makers and political thinkers, but also technologists and security experts from both private industry and the government to ensure the program is implemented efficiently, securely and meets established requirements for the program.” 

*Additional reporting by Eduard Kovacs

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Following a four-day trial, a federal jury in Nebraska convicted the former acting director of cybersecurity at the United States Department of Health and Human Services (HHS) for his involvement in a child pornography enterprise, the Department of Justice announced on Tuesday.

Timothy DeFoggi, aged 56, is the sixth individual to be convicted as a result of an FBI investigation dubbed “Operation Torpedo,” which has targeted three child pornography websites. The former director has been convicted on three charges: accessing a computer with intent to view child pornography, engaging in a child exploitation enterprise, and conspiracy to advertise and distribute child pornography.

DeFoggi, who will be sentenced on November 7, 2014, is said to have signed up for a membership on an illegal website on March 2, 2012, and was an active member until authorities took down the site in December of the same year. In addition to accessing and soliciting illegal content from other members of the website, investigators said the man also exchanged private messages with other users, expressing interest in raping and murdering children.

The website on which DeFoggi registered an account was one of the three Tor-based pedophile sites owned and operated by 31-year-old Aaron McGrath, of Bellevue, Nebraska, who has been sentenced to 20 years in prison.

Documents obtained by Wired show that the FBI tracked down McGrath after his IP address was provided to the agency by the Dutch national police’s high tech crime unit, which in August 2011 started cracking down on pedo websites.

Operation Torpedo has been controversial because the FBI didn’t immediately arrest McGrath. Instead, they monitored him for a year, time during which they planted malware on the illegal websites in an effort to identify members. The drive-by download method, which the FBI calls a “network investigative technique,” has helped the agency track down the IP addresses, MACs and hostnames of at least 25 individuals, with 14 of them facing trial.

The malware, designed only to identify the computers that had visited the illegal websites, was planted based on search warrants signed by a federal judge, who also allowed the agency to delay notifying the targeted individuals for a period of 30 days. Since some of the suspects learned only well after the 30-day period about the use of malware to identify them, defense lawyers asked the court to throw out the evidence, a motion rejected by the judge.

 Christopher Soghoian of the American Civil Liberties Union (ACLU) has pointed out that while the use of malware might seem justified in the case of Operation Torpedo, because it’s unlikely for innocent people to be prosecuted, the technique could prove problematic in other cases, such as campaigns targeting terrorists, whose online resources might be accessed for research purposes by individuals who have nothing to do with terrorism.

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