Financial Impact of Information Security Breaches on Breached Firms and their Non-Breached Competitors

2012 ◽  
Vol 25 (1) ◽  
pp. 21-37 ◽  
Author(s):  
Humayun Zafar ◽  
Myung Ko ◽  
Kweku-Muata Osei-Bryson
Keyword(s):  
Information Security ◽  
Information Transfer ◽  
Sampling Method ◽  
Denial Of Service ◽  
Financial Impact ◽  
Security Breaches ◽  
Contagion Effects ◽  
Study Methodology ◽  
Types Of Information ◽  
Event Study Methodology

Information security breaches pose a growing threat to organizations and individuals, particularly those that are heavily involved in e-business/e-commerce. An information security breach can have wide-ranging impacts, including influencing the behaviors of competitors and vice versa within the context of a competitive marketplace. Therefore, there is a need for further exploration of implications of information security breaches beyond the focus of the breached firm. This study investigates the financial impact of publicly announced information security breaches on breached firms and their non-breached competitors. While controlling for size and the industry the firm operates in, the authors focus on specific types of information security breaches (Denial of Service, Website Defacement, Data Theft, and Data Corruption). Unlike previous studies that have used event study methodology, the authors investigate information transfer effects that result from information security breaches using the matched sampling method. The study reveals statistically significant evidence of the presence of intra-industry information transfer for some types of security breaches. The authors also found evidence of contagion effects, but no similar evidence concerning competition effect.

It's Not My Fault

2019 ◽  
Vol 30 (3) ◽  
pp. 18-37
Author(s):  
Tawei Wang ◽  
Yen-Yao Wang ◽  
Ju-Chun Yen
Keyword(s):  
Information Security ◽  
Information Transfer ◽  
Large Data ◽  
Future Research ◽  
Data Set ◽  
Security Breach ◽  
Security Breaches ◽  
Personally Identifiable Information ◽  
Types Of Information ◽  
Transfer Of Information

This article investigates the transfer of information security breach information between breached firms and their peers. Using a large data set of information security incidents from 2003 to 2013, the results suggest that 1) the effect of information security breach information transfer exists between breached firms and non-breached firms that offer similar products and 2) the effect of information transfer is weaker when the information security breach is due to internal faults or is related to the loss of personally identifiable information. Additional tests demonstrate that the effect of information transfer exhibits consistent patterns across time and with different types of information security breaches. Finally, the effect does not depend on whether the firms are IT intensive. Implications, limitations, and future research are discussed.

It's Not My Fault

2021 ◽  
pp. 1916-1937
Author(s):  
Tawei Wang ◽  
Yen-Yao Wang ◽  
Ju-Chun Yen
Keyword(s):  
Information Security ◽  
Information Transfer ◽  
Large Data ◽  
Future Research ◽  
Data Set ◽  
Security Breach ◽  
Security Breaches ◽  
Personally Identifiable Information ◽  
Types Of Information ◽  
Transfer Of Information

This article investigates the transfer of information security breach information between breached firms and their peers. Using a large data set of information security incidents from 2003 to 2013, the results suggest that 1) the effect of information security breach information transfer exists between breached firms and non-breached firms that offer similar products and 2) the effect of information transfer is weaker when the information security breach is due to internal faults or is related to the loss of personally identifiable information. Additional tests demonstrate that the effect of information transfer exhibits consistent patterns across time and with different types of information security breaches. Finally, the effect does not depend on whether the firms are IT intensive. Implications, limitations, and future research are discussed.

The Impact of Information Security Events on the Stock Value of Firms: The Effect of Contingency Factors

2011 ◽  
Vol 26 (1) ◽  
pp. 60-77 ◽  
Author(s):  
Ali Alper Yayla ◽  
Qing Hu
Keyword(s):  
Information Security ◽  
Stock Market ◽  
Negative Impact ◽  
Denial Of Service ◽  
Future Research ◽  
Event Analysis ◽  
Market Reactions ◽  
Security Breaches ◽  
Stock Market Reactions ◽  
The Impact

The stock market reactions to information technology (IT)-related events have often been used as proxies to the value or cost of these events in the information systems literature. In this paper, we study the stock market reactions to information-security-related events using the event analysis methodology with consideration of the effects of a number of contingency factors, including business type, industry, type of breach, event year, and length of event window. We found that pure e-commerce firms experienced higher negative market reactions than traditional bricks-and-mortar firms in the event of security breach. We also found that denial of service attacks had higher negative impact than other types of security breaches. Finally, security events occurred in recent years were found to have less significant impact than those occurred earlier, suggesting that investors may have become less sensitive to the security events. Most interestingly, our analyses showed that the magnitude and longevity of security breaches vary with time across sub-samples. This raises some serious questions regarding the validity of analyzing only short-term stock market reactions as an indicator of the cost of security breaches, and in general, an indicator of the value of IT-related events. The implications of these results are discussed and potential future research directions are proposed.

scholarly journals The effect of cyber-attacks on stock returns

2018 ◽  
Vol 15 ◽  
pp. 70-83 ◽  
Author(s):  
Maria Cristina Arcuri ◽  
Marina Brogi ◽  
Gino Gandolfi
Keyword(s):  
Stock Returns ◽  
Insider Trading ◽  
Market Value ◽  
Cyber Attacks ◽  
Negative Effects ◽  
Market Returns ◽  
Security Breaches ◽  
Study Methodology ◽  
The Impact ◽  
Event Study Methodology

A widely debated issue in recent years is cybercrime. Breaches in the security of accessibility, integrity and confidentiality of information involve potentially high explicit and implicit costs for firms. This paper investigates the impact of information security breaches on stock returns. Using event-study methodology, the study provides empirical evidence on the effect of announcements of cyber-attacks on the market value of firms from 1995 to 2015. Results show that substantial negative market returns occur following announcements of cyber-attacks. Financial entities often suffer greater negative effects than other companies and non-confidential cyber-attacks are the most dangerous, especially for the financial sector. Overall findings seem to show a link between cybercrime and insider trading

Supply Chain Disruptions

2020 ◽  
Vol 13 (3) ◽  
pp. 78-108
Author(s):  
Greg Filbeck ◽  
Xin Zhao
Keyword(s):  
Supply Chain ◽  
Share Price ◽  
Supply Chain Disruptions ◽  
Contagion Effects ◽  
News Announcements ◽  
Production Inventory ◽  
Different Types ◽  
Growth Prospects ◽  
Study Methodology ◽  
Event Study Methodology

This study expands the work on contagion effects caused by supply chain disruptions beyond the impacted firm and competitors to its customers and suppliers. Using hand-collected data, we analyze the news announcements to determine those that resulted in disruptions in supply, demand, production, inventory, distribution, or transportation at one or more stages of a supply chain across different types of disruptions and across six market segments. Using event study methodology and regression analysis, we find statistically significant negative share price responses to announcement of supply chain disruptions for the affected firm and its competitors, but not for consumer and supplier firms. Competitors in more concentrated industries, with higher growth prospects, or with higher debt ratios, are more impacted by disruptions by peer firms. Customers firms in less competitive industries, who exhibit higher risk, or have overall lower sales react more negatively to disruption announcements.

scholarly journals Real time detection and response of distributed denial of service attacks for web services

2013 ◽  
Author(s):  
Σταύρος Σιαηλής
Keyword(s):  
Information Security ◽  
Web Services ◽  
Real Time ◽  
Denial Of Service ◽  
Distributed Denial Of Service ◽  
Web Browser ◽  
Ip Address ◽  
Security Breaches ◽  
Technical Report ◽  
Ip Spoofing

Οι κατανεμημένες επιθέσεις διαθεσιμότητας (DDoS) αποτελούν μια από τις σημαντικότερες απειλές που καλούνται να αντιμετωπίσουν οι επιχειρήσεις και οι οργανισμοί, οι οποίες τις επηρεάζουν σε καθημερινή βάση, όπως αναφέρεται στην Δημοσκόπηση πληροφοριών παραβίασης ασφαλείας του 2012[PwC (2012) “Information Security Breaches Technical Report”, April 2012]. Σε έρευνα που έγινε από την Tecdata για λογαριασμό της Arbor Networks το 2012[Techdata. (2011) Worldwide Infrastructure Security Report, Arbor Networks 2011 Volume VII], αναφέρεται σαν πιο συχνός στόχος DDoS επιθέσεων οι ιστοσελίδες διαφόρων εταιριών και οργανισμών. Την έξαρση αυτή των DDoS επιθέσεων σε ιστοσελίδες βοήθησε και η άνθιση των κινημάτων χακτιβιστών όπως οι Anonymous. Τα προβλήματα και προκλήσεις των DDoS επιθέσεων σε web υπηρεσίες είναι:•η ανίχνευση, ειδικά όταν η επίθεση συνοδεύεται με IP Spoofing•η καταστολή της επίθεσης•η εύρεση των bots και του C&C ServerΣτη διατριβή αυτή, προτείνεται μια νέα μέθοδο ανίχνευσης επιθέσεων DDoS που επιτυγχάνεται με τη σύνθεση ενός fuzzy estimator με βάση το χρόνο άφιξης των πακέτων. Το πρόβλημα χωρίστηκε σε δυο προκλήσεις από τις οποίες η πρώτη αφορά την πραγματική ανίχνευση DDoS εκδηλώσεων που διαδραματίζονται, ενώ η δεύτερη αφορά στην ταυτοποίηση των παραβιασμένων IP διευθύνσεων. Για την πρώτη πρόκληση έχουμε επιβάλλει αυστηρούς περιορισμούς σε πραγματικό χρόνο και πιο χαλαρούς περιορισμούς για την ταυτοποίηση των διευθύνσεων. Μέσω εμπειρικής εκτίμησης επιβεβαιώσαμε ότι η ανίχνευση μπορεί να εκτελεστεί μέσα σε όρια πραγματικού χρόνου και ότι χρησιμοποιώντας fuzzy estimators αντί των crisp statistical descriptors μπορούμε να χαλαρώσουμε τις απαιτήσεις και υποθέσεις του μοντέλου διαδικτυακής κίνησης (όπως το poisson). Επιπλέον κατορθώσαμε να επιτύχουμε αποτελέσματα σε διάστημα κάτω των 3 sec.Η πλαστογράφηση των διευθύνσεων IP (IP Spoofing) χρησιμοποιείται συχνά σε επιθέσεις DDoS για να προστατεύσει την ταυτότητα των επιτιθέμενων bots αλλά και να αντιμετωπίζει επιτυχώς ελέγχους και φίλτρα που στηρίζονται σε πρωτόκολλα Διαδικτύου (IP). Για την αντιμετώπιση του αυτού του φαινομένου στη διατριβή αυτή προτείνεται ένα νέο πολυεπίπεδο μηχανισμό ανίχνευσης κακόβουλου IP Spoofing, που ονομάζεται Fuzzy Hybrid Spoofing Detector (FHSD) και ο μηχανισμός αυτός στηρίζεται σε Source MAC Address, μετρητή απόστασης των Hop, GeoIP, OS Passive Fingerprinting και στον φυλλομετρητή του χρήστη (Web Browser User Agent). Ο αλγόριθμος μέτρησης της απόστασης των Hop έχει βελτιστοποιηθεί ώστε να περιορίσει την ανάγκη για συνεχείς αιτήσεις traceroute υποβάλλοντας ερωτήσεις στο υποδίκτυο του πρωτοκόλλου Διαδικτύου (IP Address Subnet) και πληροφοριών GeoIP αντί για διευθύνσεις πρωτοκόλλου Διαδικτύου (individual IP Addresses). Ο μηχανισμός FHSD χρησιμοποιεί εμπειρικούς κανόνες και τη μέθοδο Fuzzy Largest of Maximum (LoM) για τον εντοπισμό επιθέσεων σε IPs και μειώνει την κακόβουλη κίνηση δεδομένων. Το προτεινόμενο σύστημα αναπτύχτηκε και υποβλήθηκε σε δοκιμές με τον εξομοιωτή DDoS, BoNeSi με ιδιαίτερα ενθαρρυντικά αποτελέσματα τόσο στην ανίχνευση όσο και στην απόδοση. Πιο συγκεκριμένα, ο μηχανισμός FHSD ανέλυσε 10,000 πακέτα και αναγνώρισε σωστά 99,99% της κακόβουλης κίνησης δεδομένων (spoofed traffic) σε λιγότερο από 5 δευτερόλεπτα. Επιπλέον, μείωσε την ανάγκη για αίτησης traceroute κατά 97%.Κλείνοντας την διατριβή προχωράμε στην μελέτη αποτελεσματικότητας open source triage εργαλείων, για forensic ανάλυση και εύρεση τεκμηρίων συμμετοχής σε botnet. Η προσέγγιση είναι επικουρική και γίνεται προς χάριν πληρότητας της διαδικασίας ανίχνευσης των επιθέσεων. Λαμβάνοντας υπόψη ότι η άμεση και γρήγορη διαλογή δεδομένων/πειστηρίων κατά την απόκριση ενός περιστατικού ασφάλειας μπορεί κατά κύριο λόγο να συμβάλλει στην επιτυχία ή να καταστρέψει μια εγκληματολογική έρευνα αλλά και το γεγονός ότι ένας αριθμός εγκληματολογικών εργαλείων διατίθεται στο διαδίκτυο ελεύθερα χωρίς να υπάρχει μέχρι στιγμής κάποιο δοκιμασμένο framework για τη δοκιμή και αξιολόγηση τους, η παρούσα διατριβή θέτει υπό δοκιμή τρεις ανοιχτές πηγές εγκληματολογικών εργαλείων. Σε μια προσπάθεια να προσδιορίσουμε την ταυτότητα κοινών προβλημάτων, πλεονεκτημάτων και μειονεκτημάτων, τα αξιολογούμε σε αντιστοιχία ως προς την αποδοτικότητα και την αξιοπιστία τους ως προς κοινά αποδεκτές αρχές εγκληματολογικής διερεύνησης. Τα αποτελέσματα που προκύπτουν από τις δοκιμές δείχνουν πως εξαιτίας της αυξανόμενης πολυπλοκότητας και της μεγάλης ποικιλίας παραμέτρων συστήματος, τα εγκληματολογικά εργαλεία θα έπρεπε να είναι περισσότερο προσαρμόσιμα, είτε δυναμικά είτε χειροκίνητα (ανάλογα με την περίπτωση και το περιεχόμενο).

How Bad is it? – A Branching Activity Model to Estimate the Impact of Information Security Breaches

2013 ◽  
Author(s):  
Russell Cameron Thomas ◽  
Marcin Antkiewicz ◽  
Patrick Florer ◽  
Suzanne Widup ◽  
Matthew Woodyard
Keyword(s):  
Information Security ◽  
Activity Model ◽  
Security Breaches ◽  
The Impact

The Market Value and Reputational Effects from Lost Confidential Information

2015 ◽  
Vol 5 (4) ◽  
Author(s):  
Joseph K. Tanimura ◽  
Eric W. Wehrly
Keyword(s):  
Information Security ◽  
Market Value ◽  
Direct Costs ◽  
Publicly Traded ◽  
Confidential Information ◽  
Publicly Traded Companies ◽  
Security Breaches ◽  
Customer Information ◽  
Employee Information

According to many business publications, firms that experience information security breaches suffer substantial reputational penalties. This paper examines incidents in which confidential information, for a firms customers or employees, is stolen from or lost by publicly traded companies. Firms that experience such breaches suffer statistically significant losses in the market value of their equity. On the whole, the data indicate that these losses are of similar magnitudes to the direct costs. Thus, direct costs, and not reputational penalties, are the primary deterrents to information security breaches. Contrary to many published assertions, on average, firms that lose customer information do not suffer reputational penalties. However, when firms lose employee information, we find significant reputational penalties.

Effective Multi-Layer Security for Campus Network

2015 ◽  
Vol 2 ◽  
pp. 6
Author(s):  
Isiaka Ajewale Alimi
Keyword(s):  
Network Architecture ◽  
Communication Systems ◽  
Denial Of Service ◽  
High Rate ◽  
Campus Network ◽  
Security Measures ◽  
Security Breaches ◽  
Security Technologies ◽  
Network Layers ◽  
Firewall System

The development in different communication systems as well as multimedia applications and services leads to high rate of Internet usage. However, transmission of information over such networks can be compromised and security breaches such as virus, denial of service, unauthorized access, and theft of proprietary information which may have devastating impact on the system may occur if adequate security measures are not employed. Consequently, building viable, effective, and safe network is one of the main technical challenges of information transmission in campus networks. Furthermore, it has been observed that, network threats and attacks exist from the lower layers of network traffic to the application layer; therefore, this paper proposes an effective multi-layer firewall system for augmenting the functionalities of other network security technologies due to the fact that, irrespective of the type of access control being employed, attacks are still bound to occur. The effectiveness of the proposed network architecture is demonstrated using Cisco Packet Tracer. The simulation results show that, implementation of the proposed topology is viable and offers reasonable degree of security at different network layers.

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