November 11, 2010

Will Obama Declare an FDR-Style 'Bank Holiday' to Prevent a Bank Run? (Updated 1/14/11)

Sony Says 25 Million More Accounts Hacked

The Associated Press
May 2, 2011

Sony Corp. said Monday that hackers may have taken personal information from an additional 24.6 million user accounts after a review of the recent PlayStation Network breach found an intrusion at a division that makes multiplayer online games.

The data breach comes on top of the 77 million PlayStation accounts it has already said were jeopardized by a malicious intrusion.

The latest incident occurred April 16 and 17 — earlier than the PlayStation break-in, which occurred from April 17 to 19, Sony said.

About 23,400 financial records from an outdated 2007 database involving people outside the U.S. may have been stolen in the newly discovered breach, including 10,700 direct debit records of customers in Austria, Germany, the Netherlands and Spain, it said.

The outdated information contained credit card numbers, debit card numbers and expiration dates, but not the 3-digit security code on the back of credit cards. The direct debit records included bank account numbers, customer names, account names and customer addresses.

Company spokeswoman Taina Rodriguez said Sony had no evidence the information taken from Sony Online Entertainment, or SOE, was used illicitly for financial gain.

ATMs Crash Across the Country after “Bank Holiday” Warning

By Paul Joseph Watson,
November 8, 2010

Following rumors of a “bank holiday” that could limit or prevent altogether cash withdrawals later this week, Twitter and other Internet forums were raging yesterday about numerous ATMs across the country that crashed in the early hours of Sunday morning, preventing customers from performing basic transactions.

It’s unknown whether the crashes were partly a result of a surge of people trying to withdraw their money in preparation for any feared bank shutdown, or if mere technical glitches were to blame. The fact that the problem affected numerous different banks in different parts of the U.S. would seem to indicate the former.

The Orange County Register reported that the problems were “part of a national outage” which prevented people from performing simple transactions such as cashing checks and withdrawing money.

“Computer issues” were blamed for similar issues in Phoenix Arizona, while in Birmingham Alabama, Wells Fargo customers’ online banking accounts and ATMs displayed incorrect balances.

The banks primarily affected were Wells Fargo, Chase and Bank of America, but according to blogger Phil Brennan, who studied Twitter feeds and other Internet message boards that were alight with the story, numerous other financial institutions were also affected, including US Bank, Compass, USAA, Suntrust, Fairwinds Credit Union, American Express, BB&T on the East Coast and PNC.

“Twitter is going crazy with reports of ATMs and online accounts going down as of 01:00 hours EST of the 7th of November 2010,” writes Brennan. “This is happening to many banks all across America. Some are trying to say that it is a computer glitch to do with the change in Daylight Savings Time, but I will call BS on this as we manage to put our clocks back over here in the UK without knocking out ATMs and online accounts nationally.”

Brennan questions whether the outages were the first warning shots in a move to “devalue the dollar,” just days after Federal Reserve chairman Ben Bernanke sparked an international currency war by announcing that the Fed will buy $600 billion of U.S. government bonds over the next eight months.

Any perceived inability of banks to deal with a sudden demand for cash would undoubtedly place in peril the United States’ triple A credit rating and spark a fresh dollar crisis.

“In the light of what is going on geopolitically, I am still very suspicious about the reasons for this mass downtime of ATMs and Online Accounts, adds Brennan. “There is still a very distinct possibility that November the 11th will turn into an extended Bank Holiday so I would advise all those who can get their money out of their banks to do so, even if you have to pay your upcoming bills manually.”

As we reported last week, the “bank holiday” rumor has reared its ugly head once again, after a story emerged that a pastor was told by one of the managers of a prominent east coast bank that banks would close for an undetermined amount of time, and that when they reopened, “all withdrawals by checks would be limited to $500 per week – no matter what the balance in the account is.”

Though the story is still an unconfirmed rumor, banks have been preparing for limiting withdrawals. As we reported back in February, Citigroup sent an advisory to its customers at the start of the year which stated that the bank reserved “the right to require (7) days advance notice before permitting a withdrawal from all checking accounts.” The advisory stoked fears that financial institutions were preparing for bank runs.

While we still think this new bank holiday rumor will subside as the previous two did earlier this year and last, in the current economic climate it would be foolish not to keep at least a small amount of your savings in physical cash. The current financial turmoil has been likened with the post 1929 period, during which newly elected Franklin Roosevelt declared a “bank holiday” that lasted four days, therefore such a scenario is not without historical precedent.

Is an ATM Cash Shortage Coming?

By Tyler Durden, Zero Hedge
November 8, 2010

While we have no way to confirm or refute the validity of this statement presented by a supposed ATM business insider on Steve, it does bring up an interesting point regarding how banks may be conserving "petty cash." Of course, if this perspective is true, it validates concerns about bank capitalization, and explains the reason why the FDIC recently expanded insurance on checking accounts from $250,000 to infinity in an attempt to get Americans to put their money in their friendly neighborhood bank. Of course, that this contradicts everything that the Fed Chairman is trying to do by getting Americans to spend (or buy Netflix at a 1,000 P/E) instead of putting the money in the bank, is precisely the reason why Sheila Bair's relationship with Geithner and Bernanke is, shall we say, tenuous.

From Steve Quayle (who may or may not have properly attributed the original article on Urban Survival).

"George, I work with a business partner in the [region redacted] . We have combined between us 180 ATM machines that we service, Cash Load. In order to do this we NEED to order the money, 20's only from several banks on a weekly basis. This is a considerable amount weekly, 380k plus. Here is the interesting piece that is developing: In the past several weeks 4 of the MAJOR banks have informed us that they can no longer provide us with the cash for our business. Now the problem is that it is OUR money we are taking out!

So speaking with bank "personnel" on the side my question was this, what is going on? how come we cannot take OUR money out? Answer: "they" are not authorized to hold, carry or have on hand anymore more than a certain amount of cash on hand! The amount we are getting, even though it is out of our account, they cannot order or have on hand that amount of cash at any time now. I am not talking small banks...large banks [large money center bank in America name redacted] etc...!

We can see our ability to keep these machines with available cash is becoming more and more difficult. This has taken place just in the past few weeks. By the way, these banks were willing to lose our full business due to this issue. Trying to work with smaller banks now...we will see how long!"

Bob Chapman on Gold, Silver, a Bank Holiday and the Monetary Elite

The Daily Bell
August 2, 2009

Introduction: Bob Chapman has been writing and analyzing the precious metals field for decades. As one of the largest gold brokers of the 1970s, Bob experienced the ins and outs of the industry at the highest levels, and this experience has stood him in good stead. As the composer of the International Forecaster, Bob provides a savvy and often controversial take on how the industry works today and where precious metals are headed.

Daily Bell: Thanks for the interview.

Chapman: Glad to do it.

Daily Bell: You are well known for writing a good deal about a concerted, organized effort by the elite to control the global economy. What interactions have you had that provided you with this conclusion?

Chapman: I've been studying the elitists for 50 years, and I've been writing about them since 1967. None of this is new, and now because of the Internet much of it is very visible. It begins with central banking, and there is nothing to be said that can constitute a defense of central banking. A small group of men get together around a table and set interest rates, basically the price of money. They do so without supervision or the consent of those who use their money product, and they do so pretty much in secret. There is no accountability and lately, again thanks to the Internet and YouTube, people can pretty well see how nonsensical the system is.

We had a classical gold standard for 200 years that provided a good deal more monetary stability than the current system. There were problems with it, but the problems had little to do with the creation of money itself. Today we have a money problem and it is very obvious where the responsibility lies. Just go on the Internet and read about it. Then ask yourself, where did this concept of a central bank come from? Is that all there is to it? Of course not. There are plenty of forces, families and extraordinarily wealthy individuals standing in the shadows of the central bank. They didn't get a lot of exposure in previous decades, but they are certainly exposed now.

Daily Bell: Yes, the Internet has made certain contributions a good deal more obvious. And you've become a very popular read on the Internet. Can you give us a sense of your evolution as a hard-money writer and thinker?

Chapman: What got me involved in gold and silver related assets in the early 1960s were as a result of my work in counterintelligence in the middle to late 1950s. Once I found out who ran things and how I became a hard-money thinker. It just didn't seem right to me that a few individuals held so much power and did so in secret. The people in the intelligence community are basically a kind of Praetorian Guard. They're supposedly there to fight crime and protect national interests, but when you really look at what they're doing, it has more to do with protecting elite interests. If either the general population or the politicians get out of the line, there's this enormous intelligence community with the resources to make sure that they step back in.

Daily Bell: Regardless of what Western intel can or can't do, the system is obviously under stress. You've said your sources predict a bank holiday. Can you expand?

Chapman: An investigative source as well as three well-placed subscribers told me that a number of US Embassies were being instructed to purchase local currencies. That can only mean that government believes that foreign sources may not accept US dollars as happened in early 2008.

Daily Bell: They would be stockpiling currency to ensure local liquidity?

Chapman: It is not simply an exercise in embassy self-protection. My sources believe that this would be caused by a plunge in the dollar and perhaps even a short bank holiday as a training exercise for a bigger, longer holiday later.

Daily Bell: That's a pretty big story, especially if it happens. It shows the powerful forces at work beneath the surface. While you're obviously a free-market person, you also seem to believe that unions and other kinds of organized societal bodies have their place even in a free-market economy. Is this a case of the pragmatic overwhelming the theoretical?

Chapman: Yes, I would say so. Regulation is necessary in my opinion, not theoretically but pragmatically - regulation that should protect the working-man and the middle class. They have the most to lose. Most of the 20th century was spent on workers rights and rightly so. Conditions and wages were dreadful. As a result of labor unions we established a large middle class, which formed the backbone of our country. What the future holds for unions I cannot say. It depends on how the depression plays out. The forces at play are extremely powerful and there needs to be some sort of organized mechanism that counteracts what has been created. While we can see that the free-market has been overtaken to a degree by elitists and their monetary creations, the question of how to live in such a world are real and immediate. In the long-term education may work but in the short term various entities, including those that some might call populist, have a role to play.

Daily Bell: What is the biggest financial challenge the world faces in your opinion?

Chapman: Exposure of the Fed. Who really owns the Fed and what they have been doing since 1913. How the banks and brokerage firms make billions via inside information and the complicity of the SEC in scams, such as Madoff. As I've said, along with many others, it all begins with the Fed and a handful of wealthy, unelected bankers meeting in private in a room somewhere deciding on the value of money for you and me.

Daily Bell: Are gold and silver markets manipulated?

Chapman: Gold and silver markets are manipulated, but so are most other markets as well. Under Executive Order 12631 the government does as it pleases in markets. I have the order right here. It is entitled "Working Group on Financial Markets" and it came into force on March 18, 1988 signed, unfortunately, by Ronald Reagan. It's very short and you could reprint so that your readers understand the full extent of what's going on. This is by no means a dead letter. When you combine this authority with the authority of the Fed to create money, you are basically dealing with a fairly well-controlled system. It's certainly not what it was.

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:

(1) the Secretary of the Treasury, or his designee;

(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;

(3) the Chairman of the Securities and Exchange Commission, or his designee; and

(4) the Chairman of the Commodity Futures Trading Commission, or her designee.

(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.

Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and

(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

Sec. 3. Administration. (a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.

(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.

(c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.
Daily Bell: That's certainly a broad brief. And there is plenty of evidence that markets are being pushed around. But in the long term, the Invisible Hand will have its way. Where do you think gold and silver are headed pricewise?

Chapman: Gold should conservatively reach $2,500 an ounce. It could go considerably higher dependent on what happens. Silver as a result could make it to $100 an ounce. There's so much money in the system now and so little faith as to how the American administration is going to handle the current deficits that the genie is virtually out of the bottle.

Daily Bell: Do the fundamentals remain bullish for gold and silver?

Chapman: If the US and other governments had not suppressed gold prices it would currently be at $2,500. Thus, gold on fundamentals is a steal at current prices. Sooner or later the elitists will lose control.

Daily Bell: Is the world headed toward a one-world currency?

Chapman: The elitists want a one-world currency, but I don't think they will get one. The dollar will fall in value and default may occur and that could be replaced by a basket of ten currencies or a new world currency could be created, but I don¹t think the people would accept it.

Daily Bell: Sounds like the elite has miscalculated when it came to the Internet.

Chapman: The Internet is the elitists' biggest nightmare. The people are getting the truth and the elite does not like that one bit. Already a full generation has grown up with the Internet and their educational experience is a good deal different than yours or mine. There are literally millions of pages of information out there on the blogosphere that you simply could not find in your local library. But it is even broader than that. All that information is being translated into action, into broad political movements and Tea Party protests that are going to make it even more difficult for a full-level of globalism to be realized. In the 20th century, it was a good deal easier. But in the 21st, things are far more difficult. It's even hard to start a real war these days.

Daily Bell: What countries are most hospitable to gold and silver mining today?

Chapman: Canada, Chile, Argentina, Peru, Australia and South Africa.

Daily Bell: Can you give us the names of some important mining companies?

Chapman: Agnico Eagle is tops in my book followed by Goldcorp, Silver Standard and Minefinders. There are other good ones, but I like these best.

Daily Bell: Can you elaborate?

Chapman: They are all leveraged due to their small number of shares outstanding and they have outstanding management, which I have known for 14 to 25 years

Daily Bell: What are the most important - seminal -- articles of yours that you would encourage everyone to read? Where can they be found?

Chapman: Go to our site, , or visit YouTube. They are there and elsewhere. I write so much I cannot really tell which is best.

Daily Bell: On behalf of all of our readers we thank you for sharing your views with us.

By Introducing Problems into Electronic Banking, the 'Banksters' Will Lead Us to Accept Microchip Implants

According to Nick Sandberg ("Blueprint for Total Control," 2001) and Serge Monast ("NASA's Project Blue Beam," 1994):

By first removing cash and then by introducing problems into electronic money systems while simultaneously promoting microchip implants as a safe and acceptable alternative, the global elite will lead us slowly into accepting personal implant technology.

The phasing out of cash most likely will begin with some kind of worldwide economic disaster—not a complete crash, but enough to allow the New World Order to introduce some kind of in-between currency before they introduce their electronic cash to replace all paper money. The in-between currency will be used to force anyone with savings to spend or turn in their cash, because the global elite understand that people who have money are not dependent upon them and might be the very ones who will mount an insurrection against them. If everyone is broke, no one can fund a war of any kind: paper currency will cease to exist; this will be one of the first signs.

Bank of America's Online Banking System Hit by Outage

Bank of America's online banking system was been down for some of its 29 million internet customers for more than 10 hours.

The Associated Press
January 14, 2011

Bank of America Corp. says its online banking service has been restored to all of its customers.

The site was inaccessible for some users for most of the day Friday. The Charlotte, N.C., bank would not say exactly how many of its 29 million online banking customers were unable to access their accounts during the outage.

The problem appeared at around 7 a.m. EST, and was resolved at about 5:15 p.m., according to spokesperson Tara Murphy Burke. She said the majority of customers could access online banking during the day, but acknowledged that the system was slow for those who could get in.

Burke said the problem cropped up after a "routine systems change" overnight.

During the outage, a user received a message: "Error Occurred While Processing Request."

As news spread of the issue, traffic to the website increased and it became more difficult to access.

The bank's ATM network was operating normally, Burke said.

It's not the first time customers of the nation's largest bank have had trouble accessing their accounts. The site was down for about four hours on Aug. 27, and there was a similar outage about a year ago.

Other banks have had similar problems, including a problem at in September that persisted for more than a day.

In December, Bank of America joined several other financial institutions in refusing to handle payments for WikiLeaks, the secret-releasing organization that is rumored to be preparing a release on the bank itself. The bank's actions followed similar moves by MasterCard Inc. and PayPal Inc. The bank's site did not show any impact from hackers at that time in response to its refusal.

Computer Meltdown Leaves Millions of Aussies Without Cash

November 27, 2010

A freak computer glitch at Australia's biggest bank froze cash machines and left millions of people struggling to access their money on Saturday.

National Australia Bank (NAB), Australia's biggest bank, said a corrupted file wiped out a huge number of transactions, including salary payments and transfers, and crashed some ATMs, angering many customers who were facing a weekend without money.

Spokeswoman Meaghan Telford said NAB was opening branches on Saturday and Sunday and bringing in extra call-centre staff as technicians scrambled to fix the problem.
"We're very apologetic," she told AFP. "We recognise this has caused people a lot of inconvenience. We're just working to resolve the problem."
Telford said the rogue file knocked out transactions on Wednesday, including salary deposits, bill payments and transfers to other banks. As the electronic system buckled, some ATMs had crashed, she said, without revealing how many.
"There's been some issues with the electronic system because of the pressure the system has been under as a result of trying to resolve these issues," she said. "This has meant some ATMs have experienced issues."
Customers using microblogging site Twitter reported chaos with their bank accounts as mystifying sums appeared and disappeared, leaving many unable to withdraw cash.

Telford said NAB had cleared most of the delayed transactions but could not predict when the system would be back to normal. She did not estimate how many of NAB's 11.5 million customers were affected.

According to national news agency AAP, international banking giant HSBC's transactions to other banks, payroll deposits and direct debits were also affected, as NAB clears payments for HSBC in Australia.

NAB also warned on its website that its Internet banking was slow as millions of customers checked their accounts.

The meltdown comes at a time of growing discontent towards Australia's "big four" banks over rising interest rates and a swathe of minor fees, with even Prime Minister Julia Gillard urging unhappy customers to switch lenders.

Last week 250 investors brought a multi-million dollar lawsuit against NAB claiming it failed to properly disclose its exposure to toxic US debt during the financial crisis.

Major Mobile Banking App Security Holes Uncovered

Digital Trends
November 5, 2010

You might not want to check your bank account from your phone after all. Mobile apps from USAA, Chase, Wells Fargo, Bank of America, and TD Ameritrade have major security holes, reports research firm viaForensics and WSJ. The bugs center mainly around iPhone and Android versions of the apps, and could potentially allow a hacker to learn your username, password, and some financial information. In other words, this is bad.

The apps currently save sensitive information in the phone’s memory. If the device is stolen, a criminal could hack into the physical phone and extract everything they need to remotely access the bank account. Worse, if the smartphone user is conned into visiting a malicious website, the information could also be extracted.

ViaForensics is already working with the banks to fix the bug.
“Since Monday (11/01/2010), we have been communicating and coordinating with the financial institutions to eliminate the flaws,” the research firm said. “The findings we published reflect testing completed on 11/03/2010. Since that time, several of the institutions have released new versions and we will post updated findings shortly. We applaud the effort several institutions put forth to quickly patch the vulnerability and protect their customers. viaForensics hopes that our efforts help not only companies but users to protect their identity, financial data and other sensitive information.”
Wells Fargo and USAA have already released patches for their apps, and encourage users to download them. Bank of America should have an update out in the next few days, and TD Ameritrade will fix the issue in the next 30 days.

Unfortunately, this is not the first security breach for a mobile app or OS. In June, a major iPad security hole was found, potentially exposing 114,000 users’ information. A flaw allowing users to bypass lock screens on iOS 4.1 was also exposed recently.

12 million people in the U.S. used mobile banking apps and websites last year. Analysts expect this number to rise to 18 million in 2010.

Chase Bank Website Down Because of Technical Issues

Journal Sentinel
September 14, 2010

The website of Chase bank is down Tuesday because of technical issues, a company spokeswoman said.
"We're working on restoring access," said Christine Holevas. "In the meantime, we encourage customers to either call us at 800-935-9935 or go to a branch if they have immediate needs."
Holevas did not say how long the website hasn't worked. But one customer who relies on the Chase website for online banking told the Journal Sentinel he has been trying to access the Chase site since 8 a.m. Tuesday.

Chase has 16.5 million customers who bank online.

Holevas said Chase ATMs aren't affected, and that the outage doesn't involve a security breach.
"It's a technical issue, not a breach," she said.
Chase is part of JPMorgan Chase & Co., the second-largest banking organization in the nation. It has 77 branches in Wisconsin, according to FDIC records. Only Bank of America is larger than Chase.

Judge OKs Countrywide Data Breach Settlement

The Associated Press
August 24, 2010

A federal judge yesterday granted final approval to a settlement between Countrywide Financial Corp. and millions of customers left at high risk for identity theft because of a security breach.

Countrywide, now owned by Bank of America, will provide free credit monitoring for up to 17 million people whose financial information was exposed, according to the settlement. That group includes anyone who obtained a mortgage and anyone who used Countrywide to service a mortgage before July 1, 2008.

People could be reimbursed up to $50,000 for each time their identity was stolen. They would have to prove they lost something of value, weren't already reimbursed and that the theft stemmed from the Countrywide breach.

U.S. District Judge Thomas B. Russell of Paducah, who oversaw more than three dozen lawsuits related to the security breach, granted class-action status to the lawsuit and gave final approval of the settlement yesterday.

Russell wrote in his 21-page ruling that the settlement provides immediate relief for possible identity theft victims — relief that would likely have been delayed as appeals wound through the courts.
"This settlement provides safeguards that would not otherwise be available to millions of people, at a time when such measures are needed most," Russell wrote.
Shirley Norton, a spokeswoman for Bank of America, said the company denies all allegations of wrongdoing or liability in the case.
"We settled because we believe it is in the bank's best interest to settle the suit and avoid the additional expense and uncertainty of further litigation," Norton said.
Plaintiffs' attorneys Ben Barnow and Daniel Haviland did not immediately return messages seeking comment.

A group of about 3,000 people affected by the identity theft objected to or opted out of the settlement, saying two years of credit monitoring isn't enough or that the settlement didn't do enough to make amends.

Russell noted that about 630,000 people visited the settlement web page, 500,000 called the toll-free number for information about the settlement and 500,000 requested detailed notice of the settlement.

Plaintiffs' attorneys will receive $3.5 million in fees for their work.

Attorneys for the plaintiffs say Countrywide Financial had all their clients' financial information including mortgage information, credit card, and Social Security numbers and birth dates.

The lawsuits stem from the arrest of Rene Rebollo Jr., of Pasadena, Calif., a former senior analyst for Countrywide, and Wahid Siddiqi, of Thousand Oaks, Calif. Federal investigators said Rebollo used a flash drive to download data from about 20,000 customers a week for two years from 2006 through August 2008.

Rebollo then sold the information to Siddiqi for $500 and earned a combined $50,000, federal investigators said. Siddiqi pleaded guilty in 2009 to 10 counts of fraud and admitted to selling the information to third parties, including an undercover FBI agent.

Rebollo has pleaded not guilty to a new indictment handed up in May and is awaiting trial.

Countrywide has said that it worked closely with the FBI and federal investigators and that the security breach does not appear to have resulted in anyone's identities being stolen.

Interior Loses CD with Personal Data for 7,500 Federal Employees

Department's shared services center says data encrypted, password-protected

Federal Computer Week
June 16, 2010

A compact disc that contains personally identifiable information for about 7,500 federal employees has been reported lost by the Interior Department’s shared services center.

The incident occurred on or about May 26, when a procurement specialist at Interior’s National Business Center in Denver reported that the CD could not be located. The disc was sent to the business center by a third-party service provider, according to a June 10 news release.

The CD has not been found, Terri Raines, a spokeswoman for the National Business Center, said today.

The data on the CD was encrypted and password-protected, and was used to support billings from the vendor, Raines said. The disc was presumed to be lost in the center’s secured, restricted-access area, she added.
“National Business Center believes the risk of someone gaining malicious access to the data is low,” the business center said in the news release.
Interior has followed breach notification procedures to contact the federal employees involved, who work for a number of federal agencies, including Interior, according to Raines.
“We also are reviewing processes so that this does not happen again,” Raines said. The business center has changed its procedures so that this type of data is received only through secure network connections in the future, rather than from a CD.
Because the business center is a shared service center, the CD contained data for federal employees from multiple agencies, including Interior.

All persons affected by the breach will receive a letter of advisement through the U.S. Postal Service alerting them to the breach. The business center has established an Incident call center to provide information and answer questions.

Hawaii U Posted Private Info of 40,000 Students Online

AOL News
October 29, 2010

More than 40,000 former University of Hawaii students now know what plenty of others before them have regrettably experienced firsthand: Security online can be elusive.

The students' Social Security numbers, grades and other private information were made public after a faculty member at the school accidentally posted the information online, according to The Associated Press.

The sensitive information of anyone who attended the school's Manoa campus from 1990 to 1998 or in 2001 was available over the Internet, university spokesman Ryan Mielke told the AP.

The security breach happened when the now-retired faculty member, who was not named, was conducting research on graduation rates. Although she thought she was working on a secure server, she was not, officials said. The information was available for nearly a year before it was discovered and taken down Thursday.

Sensitive information of students who attended the University of Hawaii's Manoa campus from 1990 to 1998 or in 2001 was inadvertently made available online.

Mielke called it an honest mistake.
"The faculty member truly believed it was an encrypted server and it was not, it was an error," he told KHON2 in Hawaii.
The school said it was in the process of notifying the students impacted by the breach and warned them to secure their banking information, since data like Social Security numbers can be used in scams and for fraud.

Unfortunately, the students at the University of Hawaii are far from the only ones whose privacy has been compromised on the Internet. Here are some of the most infamous cases of Web-related information security breaches:

Just this month, The Wall Street Journal reported that online advertising companies were able to access the names of millions of Facebook users through the social networking site's most widely used applications, also known as "apps." The company said it is committed to closing the privacy loophole.
"We take user privacy seriously," Facebook developer Mike Vernal wrote Oct. 18 in a company blog post. "We are dedicated to protecting private user data."
In a more disturbing, if less widespread breach, (now former) Google engineer David Barksdale, 27, allegedly invaded the personal Google Voice account of a 15-year-old boy he met online, Gawker reported in September. After discovering the identity and contact information of the boy's girlfriend, Barksdale allegedly threatened to call her. Google fired Barksdale this summer. In a statement, Bill Coughran, senior vice president for engineering at Google, said the company "dismissed David Barksdale for breaking Google's strict internal privacy policies."
He said that "a limited number of people will always need to access these systems if we are to operate them properly -- which is why we take any breach so seriously."
In December, the Transportation Security Administration accidentally posted online its airport screening manual, a packet that included information about the easiest kinds of documents for terrorists to fake and the percentage of baggage that is to be screened by hand. Last year, Sen. Susan Collins, R-Maine, called the document "a road map to those who would do us harm," according to ABC.

In August, the Pentagon publicly acknowledged that it was the victim of a cyberattack and said hackers had penetrated the Department of Defense with malware.
"It was a network administrator's worst fear: a rogue program operating silently, poised to deliver operational plans into the hands of an unknown adversary," Deputy Secretary of Defense William J. Lynn III wrote in an article in Foreign Affairs magazine. He said the malware established "what amounted to a digital beachhead, from which data could be transferred to servers under foreign control."

Latest Security Breach Exposes 40 Million Credit Card Accounts to Potential Fraud

Consumer Affairs
June 18, 2005

More than 40 million credit cards are potentially at risk in the largest security breach to come to light so far. MasterCard International Inc. has started notifying member banks of about 13.9 million accounts involved in the latest incident, which involved a card-processing operation in Tucson, Arizona.

In a statement, MasterCard said the breach was traced to CardSystems Solutions Inc., a third-party processor of payment card data. It said the compromised data included names, banks and account numbers -- not addresses or Social Security numbers -- and said such data could be used to steal funds but not identities...

MasterCard said it has begun notifying its member banks of specific card accounts that may be vulnerable, so that those banks can take steps to prevent against fraud. Visa USA did not immediately comment on the situation. American Express said that less than 0.5% of its domestic transactions are handled by CardSystems. Discover said it was "aware of" the situation but did not say whether any of its cardholders were affected.

MasterCard blames a single individual for the massive security breach.
"(V)ulnerabilities allowed an unauthorized individual to infiltrate their network and access the cardholder data," MasterCard said.
The company said the perpetrator used "a virus-like computer script that captured customer data" but would not elaborate further. The FBI said it was investigating.

CardSystems officials said they first noticed a potential security breach on May 22 and contacted the FBI a day later. Visa, MasterCard, and other companies were notified as CardSystems brought in third-party security experts to review their systems...

It's the latest in an embarrassing series of security breaches involving both consumer identity data. It appears to be the largest yet involving financial data, said David Sobel, general counsel at the Electronic Privacy Information Center.
"The steady stream of these disclosures shows the pressing need for regulation of the industry both in terms of limitation in the amount of personal information that companies collect and also liability when these kinds of disclosures occur," Sobel told the Wall Street Journal...

Thousands of Debit Cards Canceled Due to Security Breach

Consumer Affairs
February 14, 2006

If you're a customer with a major bank chain, and you're finding that your debit card suddenly doesn't work, you may be one of the victims of the latest alleged data security breach. Several maor banks have canceled the debit cards of as many as 200,000 customers in the last week, after reports that the databases of a major office-supply retailer were hacked. The thieves obtained personal information including names, debit card numbers, and the personal identification numbers (PINs) used to authorize transactions.

The FBI and Secret Service are pursuing the investigation, which so far centers around reports of fraudulent charges from both Wal-Mart's Sam's Club division, and possibly from national retailer OfficeMax.

The mystery began when Bank of America customers received notices that their debit cards were canceled in early February, due to an unidentified "third-party" breach. Bank of America promised to replace the debit cards as soon as possible, but did not provide customers with any more detail about the incident.

Bank of America was joined by Wells Fargo and Washington Mutual, both of which issued notices to certain customers that they were canceling and replacing their debit cards due to a similar breach.

All three banks have remained silent on the incident, claiming that the investigation is ongoing and that they cannot reveal any more detail. Investigators are also keeping mum, leaving frustrated consumers seemingly in the dark.

But the trail doesn't end there. CNET staff writer Greg Sandoval reported that Wal-Mart had notified the public of a potential data breach in Dec. 2005, centered around Sam's Club customers who had bought gas at Sam's Club gas stations between Sept. and Oct. 2005.

Merchant card processor CardSystems had reported to Visa and MasterCard that there was a potential data breach of Wal-Mart's records in Nov. 2005, according to eWeek. At least one bank, Regions Financial, promptly canceled and reissued 100,000 debit cards after the news.

Another suspect is retail chain OfficeMax. The FBI had already been investigating a breach involving the Golden 1 credit union in Sacramento, California in Nov. 2005, which led the credit union to cancel 1,500 members' cards. Although the agency declined to provide specifics, sources claim the breach occurred at a retail chain store in Sacramento, and that many of the affected customers in both breaches had shopped at OfficeMax in recent months. OfficeMax spokesman William Bonner said that to his knowledge, no fraud or security breach had occurred. There has been no statement indicating that the two breaches are connected.

CardSystems itself is notorious for its failure to protect the data of 40 million Visa and MasterCard users from a ring of identity thieves, which led to 263,000 accounts being usurped. Speculation exists that the CardSystems data breach may also have led to thousands of cardholders getting hit with "spam charges" in what is now called the "Digital Age Fraud."

CardSystems was sold to payment processing company PayByTouch, which specializes in biometric identification. Visa had initially threatened to terminate its business relationship with CardSystems after the data breach, but agreed to continue doing business with the company until its sale to PayByTouch is complete, as of January 21st.

Citibank's Cards Mysteriously Shut Down

Consumer Affairs
March 8, 2006

Jacob Appelbaum was traveling through Toronto, Canada, on March 4th, 2006, and innocently stopped to get some cash out of his Citibank account via ATM. Little did he know that this simple act would open the door to yet another massive security breach surrounding debit cards and ATM networks. Appelbaum tried repeatedly to withdraw $100 from his account, and was denied, his account marked as "ineligible."

He tried contacting Citibank, and was told that there had been a breach of the ATM network Citibank uses for transactions in Canada, Britain, and Russia. His card would be canceled and reissued, but as he was outside the U.S., that was of little help to him.
"The ATM network in Canada has been compromised and as a result, using my ATM card over the Canadian network locked my account automatically," he related. "[The bank representative] informed me that this has been an ongoing issue for the last two weeks. When I asked why there was no media attention, she said she wasn't sure. I said it was a pretty big deal and she agreed."
Appelbaum, a network security consultant by trade, wasn't satisfied with the answers he got. He asked if a "class break" was responsible for the ATM compromise. In security parlance, a "class break" is when one particular breach opens up a network to more breaches, and can attack different security instances in one system. The Citibank representative he spoke to confirmed -- at the time -- that this was the case.

But was it?

As is often the case these days, blogs and independent news sites picked up on Appelbaum's story before the mainstream media did. BoingBoing, one of the Web's most highly trafficked blogs, took notice of the incident and followed up on it.

Other instances of Citibank debit and credit cards being shut down and leaving their users without cash began to surface. Pro-shopper blog the Consumerist got a note from someone claiming to be a Citibank employee, who related that Citibank employees were just as clueless about the breach as their customers.
"A client came into the branch late last week (She was traveling in Canada), and her card stopped working for no reason," the anonymous writer said. "She called up Citiphone and they gave her no reason as to why the card was blocked, and had a new card sent to our branch. Since she was in Canada, this really didn't help her out one bit."
Citibank issued a press release on March 6th stating that the cards were locked due to "previous retailer breaches" in the U.S.
"To protect customer accounts that were affected, we placed a special transaction block in those three countries on PIN based transactions," the statement said. "We are currently reissuing cards, as appropriate, to affected customers."
Details regarding the particular retailer that may have been responsible were not provided to the public. A Citibank spokesman, who asked not to be identified, would only say that the breach "happened in the United States to a small number of affected accounts."

The bank blocked access to the accounts when it noticed a large number of "fraudulent cash withdrawals" in ATMs outside the country in mid-Feb. 2006, the spokesman said. When asked why the bank would not confirm the identity of the third party that caused the breach, the spokesman said that "we don't know precisely who it was, and even if we did, we couldn't discuss it publicly for a variety of reasons."

Speculation has it that the "third party retailer breach" may be connected to a similar shutdown that occurred last month, in which Bank of America and Washington Mutual customers suddenly found their cards disabled.

The FBI and Secret Service are continuing to investigate the breach, with claims that it centers on retail behemoths Wal-Mart and Office Depot. Although Wal-Mart has admitted to a security breach in Nov. 2005 that forced at least one bank to reissue hundreds of cards to its customers, both retail chains are publicly denying any new security breaches or hacks in recent months.

There is also the possibility that the data breaches come from the hack of the CardSystems payment processing database. Forty million Visa and MasterCard users' information was exposed to identity thieves in the CardSystems breach, with approximately 260,000 accounts actually hacked or stolen. CardSystems recently settled charges with the Federal Trade Commission (FTC) that it failed to provide appropriate security measures to protect consumers' private information. The company was recently bought by Pay By Touch, a biometrics-based payment processing company.

Jacob Appelbaum is skeptical of Citibank's claims and was unimpressed with their response to the situation.
"This sounds like an issue that's unrelated to cards just being rejected, doesn't it?" he said to BoingBoing. "If it was just the networks rejecting cards, why did I need to have a new card reissued?" Speaking to, Appelbaum reiterated his belief that the breach was not what it seemed to be. "It doesn't make very much sense," he said. "[Citibank's response is] void of any real information. It doesn't state who was compromised and when. It doesn't give the details as to why my new card would be possibly locked just for using the Canadian ATM system... As I've said before, something doesn't add up."

Citibank's Computers Down, Blocking Account Info

The Associated Press
December 17, 2008

Customers of New York City-based Citibank have lost access to much of their account information because of a computer outage. Many of the troubled bank's clients haven't been able to retrieve account details online or by telephone since Tuesday (December 16) afternoon. Others can access only parts of their account profiles.

Citibank telephone representatives say they don't know what caused the outage but technicians are working to fix it. They've been telling customers to call back after Wednesday (December 17) morning. A Citibank spokeswoman hasn't replied to a phone message or an e-mail sent after business hours.

Citibank is a division of Citigroup Inc., which is struggling to survive the global financial crisis with billions of dollars in aid from the government.

Technical Problem Shuts Down Canada's Stock Exchange

The Canadian Press
December 17, 2008

The Toronto stock exchange is down--meaning today (Wednesday) that its computers are not conducting trades and have not been all morning.
"We've halted the Toronto stock exchange and TSX Venture Exchange and we will update you as soon as we are able," said Caroline Quick, director of communications at market operator TMX Group Inc. (TSX:X). "It's a technical issue," she added, declining to elaborate...

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