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Post Mortem of GunnAllen IT Meltdown 192

Posted by Unknown Lamer
from the but-it-was-business-class-cable dept.
CowboyRobot writes "The story begins when GunnAllen, a financial company, outsourced all of its IT to The Revere Group. Before long, it was discovered that 'A senior network engineer had disabled the company's WatchGuard firewalls and routed all of the broker-dealer's IP traffic--including trades and VoIP calls--through his home cable modem.' In addition to the obvious security concerns of sending information such as bank routing information and driver's license numbers, the act violated SEC rules because the routed information was not being logged. Regardless of whether the cause was negligence, incompetence, or sabotage, the matter was swept under the rug for a time until unpaid SQL Server licenses meant threatening calls from Microsoft as well. The rest of the story is one of greed, mismanagement, and neglect, and ends with the SEC's first-ever fine for failure to protect customer data."
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Post Mortem of GunnAllen IT Meltdown

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  • Trusted Advisor? (Score:4, Informative)

    by Frosty Piss (770223) * on Monday October 08, 2012 @10:18PM (#41592803)

    Wow, according to the The Revere Group website:

    WHEN TRANSFORMING THEIR BUSINESS, TOP PERFORMERS TURN TO A TRUSTED ADVISOR

    Guess that's not The Revere! Group

  • Outsourced (Score:5, Interesting)

    by Anonymous Coward on Monday October 08, 2012 @10:26PM (#41592841)

    Yeah keep outsourcing the responsibility of something so crucial that IT people hold the keys to the kingdom.
    This is nothing new in the world of IT. Save a dime to lose a million dollars.
    I am in a comany right now where they hired IT consultants for well over 3 years and come to find out so called "Experts" where just patching the system but never really fixing the real issues. It's amazing to see what these contractors were selling to a company who had the money to buy great gear only to discover pure incompetence at implementing it. I am no expert by any means but I can smeel bullshit when I see a network in need of a lot of TLC.

  • Sigh... (Score:5, Interesting)

    by Black Parrot (19622) on Monday October 08, 2012 @10:28PM (#41592847)

    A financial company outsourcing its IT ought to be considered criminal negligence.

    (Though an own employee could do the same thing, in this case.)

    • Re:Sigh... (Score:5, Insightful)

      by DigiShaman (671371) on Monday October 08, 2012 @10:51PM (#41592973) Homepage

      Agreed. I work in the MSP (Managed Service Provider) sector which is a fancy way of saying that we are outsourced IT. We focus on the SMB market where a company is too small to have a dedicated IT department, but just large enough that they place a trouble ticket in our queue once a week. Sometimes once a day. Anything ranging from tier 1 to 3 support.

      However, once you as a company get involved with needing to be HIPPA, PCI, or SOX compliant, that should be synonyms with "dedicated in-house IT dept".

      • I'd have to disagree. We have our own in house IT department... but a small part of our business is providing outsourced IT. And our stuff ridiculously overbuilt and robust. I doubt anyone could do it in house better. But it's expensive as hell, and not very flexible. If you're not getting too creative with your needs, and you have the money, you can get something very robust. But if you want to go on the cheap and still get some crazy ass system no ones ever tried before to work, then I think you're shit o
        • Re:Sigh... (Score:4, Insightful)

          by LordLucless (582312) on Tuesday October 09, 2012 @12:46AM (#41593503)

          I'd have to disagree. We have our own in house IT department... but a small part of our business is providing outsourced IT. And our stuff ridiculously overbuilt and robust.

          It's not about robustness in these instances. It's about power and accountability. When you have hugely sensitive information (medical records, credit card details or financial records) you must be in control of your own systems. While downtime sucks, downtime is often better than data compromise in these cases.

          • That sounds grossly naive. What company over the size of 0 employees doesn't have one of the following: Medical records, Credit card details, or financial records? Every single company has those, even companies that have 1 part time person in it. I seriously don't think there is enough IT professionals in the entire world worth a damn that you could have 1 at every single company.

            Outsourcing isn't the problem with data breaches. Outsourcing to companies that back up their promises with financial guarant

            • by drinkypoo (153816)

              That sounds grossly naive. What company over the size of 0 employees doesn't have one of the following: Medical records, Credit card details, or financial records? Every single company has those, even companies that have 1 part time person in it. I seriously don't think there is enough IT professionals in the entire world worth a damn that you could have 1 at every single company.

              You're being grossly obtuse. We're talking about a bank here. They are directly responsible for customer data, and they are explicitly on the hook in the case of data breaches. It is a gross failure of responsibility not to maintain IT in-house when your entire business is built on IT, which is the case in banking today. They can't do anything for you if the computers are down, except take a deposit and give you a handwritten slip in exchange. And if I walk into my bank and their computers are down in this

              • It is a gross failure of responsibility not to maintain IT in-house when your entire business is built on IT, which is the case in banking today.

                Why? Contractors are still people, just their payroll department is elsewhere. They live in your building, sit at your desks, use your computers. I mean hell, I worked at the Social Security Administration and most people at the NSA are contractors. Some of my coworkers WERE NSA at one job for a while; we worked in the same office, I wasn't cleared and they didn't work on secret projects in the same office because that office wasn't a secure room or else, you know, I wouldn't be allowed in it.

                • by tibit (1762298)

                  So I ask, then, what's the fucking point? Hire the people and be the one who's in control. Don't pay someone else's profits.

                  • Well, you have a small shop of specialized people to handle a handful of sparkly-resume folks to hopefully do the job right. To hopefully improve chances of doing the job right, you hire a guy who seems pretty smart and has a sparkly resume to act as a manager of these sparkly-resume college kids. For all this, you get to cover logistics and take on the liability of managing them; and when things get out of hand, they outsource to the Internet or friends from college, leaking hints of your internal operat

                    • by tibit (1762298)

                      Yeah, but how do you know that the IT shop you're hiring is not in fact full of morons? There seems to be plenty of such IT shops around, big ones, even. You need some sort of external references or vetting if you lack your own know-how no matter whether you're hiring a shop or "just" some employees. In light of seemingly endless snafus masterminded by big consulting firms, I'd much rather hire the right people even if initially just as consultants and have direct managerial oversight. I mean, you must be g

              • The article is specifically about a bank, but lordlucless wasn't speaking about the bank specifically. He took one example then expanded it to encompass basically every company on the planet.

                As for your post:
                1) Banks are hardly "built on IT". Not much more so than any other company out there. You walk into a store and the "computers are down" (this included McDonalds), and either they do the same thing, take your money have hand you bank a handwritten slip, or they are just closed. Like most companies,

              • by andy1307 (656570)

                They are directly responsible for customer data, and they are explicitly on the hook in the case of data breaches. It is a gross failure of responsibility not to maintain IT in-house

                Right....because banks with in-house IT departments don't suffer from data breaches...

        • I'd have to disagree. We have our own in house IT department... but a small part of our business is providing outsourced IT. And our stuff ridiculously overbuilt and robust. I doubt anyone could do it in house better. But it's expensive as hell, and not very flexible.

          I bet you can't even see the irony of your post. If it expensive and inflexible then it's quite easy to do it better don't you think? The problem you haven't addressed is that every business has different requirements and not all of them require super-robustness. I worked both sides of the fence, and MSP has it's place but it isn't the solution for everyone (as TFA quite nicely demonstrates).

      • by cbhacking (979169)

        Actually, given the specific expertise and experience required for such compliance (at least, for doing it right), I can see an argument for specialized IT services companies that handle the needs of companies up to a certain size (bigger than you were talking about, though not necessarily by much; still too small to make it worth hiring a team of such people). The problem is, you've got to assign responsibility along with that contract. LOTS of responsibility, as in no-feasible-way-in-hell-you-could-save-m

      • by AK Marc (707885)
        I worked for a VAR for a while, and we sold a lot of wireless gear to a hospital and set up the system, with HIPAA compliance and all. For a relatively large hospital. There wasn't much of an IT department. I think IT people don't like working for doctors, I'm not sure anyone likes working for doctors.
      • by DennyK (308810)

        I used to work for a web hosting company, and it was amazing how many of our clients would submit support tickets demanding that we make their $15/mo shared web hosting accounts PCI compliant. We even had some actual *banks* hosting their web sites on our cheap shared accounts. I suspect a lot of the problem was that these customers had no IT staff or knowledge and didn't understand that their requests were ridiculous or what a terrible idea it was to store unencrypted financial data on a third party shared

    • Re:Sigh... (Score:5, Insightful)

      by girlintraining (1395911) on Monday October 08, 2012 @11:47PM (#41593259)

      A financial company outsourcing its IT ought to be considered criminal negligence.

      Outsourcing IT isn't the problem. A failure to oversee the IT services provided was the problem; A complete lack of auditing and process control. I wish people would stop looking at outsourcing as somehow evil; It makes sense in a lot of cases. Most corporations have other companies contracted to replace and maintain printers. Most office printers have the ability to retain all documents printed from it, locally, to a harddrive inside it. That isn't a problem by itself -- unless you don't know that the functionality is enabled, and don't audit or remove the drives before the printers are rolled out the front door with all your confidential data... that you thought was secure because you had a contract to shred all your documents.

      The story of GunnAllen's criminal negligence starts with the CTO and board of directors -- who fired people for coming forward with security problems, and had a very obvious closed-door policy. Nobody with the parent company wanted to hear about problems, and it's no surprise that the firm they contracted with heard that loud and clear -- and propagated the same attitude right on down the line. "See no evil, hear no evil" often leads to a lot of people doing evil.

      GunnAllen's story is one being repeated by the thousand every morning of every workday across our industry. Managerial incompetence leads to otherwise trivial problems becoming fines, bankrupcy, and lawsuits. This story is not about the failures of IT -- IT was involved, but it was not that failed. It was the people at the top... and when the extent of the damage was finally discovered by the government, they tried to pin it all on former employees and the people under them. I'd like to know where those managers are now; Because I know they'll eventually find themselves in another position of power at another company. Whereas all the engineers and people who actually worked for a living, well... we all know what happened to them, whether the article says so or not.

      You want to fix problems like this: Start with accountability.

      • by mjwx (966435)

        Outsourcing IT isn't the problem. A failure to oversee the IT services provided was the problem;

        Which is difficult to impossible to do unless you're directly managing the technicians. In which case, why are you paying another company A$200 an hour when the same techs would jump at being directly offered A$35-60 an hour (consulting rates in Oz).

        So we're back to outsourcing being the problem. There may be more to it than that, but if you need 100% control, you cant get that by going through third party.

        • In the US, it's $35-$60/hr plus the cost of benefits plus compliance with EEO laws plus payroll taxes plus you actually have to run payroll and accounting for all that instead of dumping a brick of cash into a line-item on your accounting.

      • by drinkypoo (153816)

        You want to fix problems like this: Start with accountability.

        Yes, and you start with accountability by keeping your IT in house, where you have some control over the IT workers. In fact, outsourcing is primarily a vehicle for disposing of accountability; as long as the company you're outsourcing to claims responsibility, you get to avoid it. And then you have situations like this. Anyone outsourcing their IT is a dumbfuck. The only businesses who should ever hire anyone external to do any computer work are those whose business is too small to justify a full-time IT e

    • A financial company outsourcing its IT ought to be considered criminal negligence.

      (Though an own employee could do the same thing, in this case.)

      I worked at a hospital with around 1000 computers and IT was onsite but contracted from a 3rd party. So, that's odd but get this! They outsourced the support calls to Mexico! Yeah, you could walk right down to the damn IT office yourself on floor 1 and get your problem taken care of or you could call Mexico. You could even simply get an extension of someone in IT and call that...or call Mexico! MEXICO! AT A HOSPITAL! By the way, I was there on a 6 month PC replacement project from a different contract

  • by cluedweasel (832743) on Monday October 08, 2012 @10:28PM (#41592849) Homepage
    Here's the printer friendly page. The whole article on one page; http://www.informationweek.com/security/attacks/exclusive-anatomy-of-a-brokerage-it-melt/240008569?printer_friendly=this-page [informationweek.com]
  • by damn_registrars (1103043) <damn.registrars@gmail.com> on Monday October 08, 2012 @10:52PM (#41592985) Homepage Journal
    Are you trying to tell me that the SEC has rules? That they enforce? I don't believe this. This does not reflect the US that I live in; are you perhaps talking about some other country with more reasonable laws about this kind of thing - maybe you meant to say it happened in Armenia, not America?
    • Re:Wait a minute... (Score:4, Interesting)

      by jamstar7 (694492) on Monday October 08, 2012 @11:21PM (#41593123)
      Of course the rules get enforced, if you're small enough to where you can't outlawyer the Feds. Why you think none of the big brokerage houses faced prosecution? For every lawyer the DoJ fielded, the brokerages fielded *5* or more.. And it didn't help that a Republican-controlled Congress cut their funding to the point where the DoJ was damned near useless.
      • Re:Wait a minute... (Score:4, Interesting)

        by khallow (566160) on Tuesday October 09, 2012 @12:37AM (#41593461)

        And it didn't help that a Republican-controlled Congress cut their funding to the point where the DoJ was damned near useless.

        Even with funding, the DoJ would be pretty useless. I'll just trot out the current Republican talking points about Fast and Furious since they'll illustrate a good reason why the Republicans wouldn't be inclined to fund the Department of Justice.

        Here, you have a pretty much cut and dry case. ATF agents allowed roughly two thousand fairly high quality guns to pass to Mexican drug cartels with no attempt made to track those weapons. Since those weapons have turned up at many crime scenes, including the murder of a US border agent (which is what finally shut down Fast and Furious). Further, the ATF agents involved knew for a few months before that final murder that these weapons were turning up at crime scenes, including murders. So a prosecutor has a pretty good case that someone committed a bunch of acts of accessory to murder (with reckless disregard for human life) and other crimes, plus the murder of a federal law enforcement officer. So what is the Department of Justice doing with this case? Hiding the agents involved in Washington DC. When will they investigate this?

        This is why the "more funding" argument doesn't work. If the Department of Justice isn't going to do its job, then it doesn't really matter how much they're paid so might as well make it a little rather than a lot. The SEC is particularly notorious for providing the illusion of security for novice investors, or in other words, helping keep the marks from getting scared off before they can be fleeced.

        • by Bill_the_Engineer (772575) on Tuesday October 09, 2012 @10:09AM (#41596021)

          Even with funding, the DoJ would be pretty useless. I'll just trot out the current Republican talking points about Fast and Furious since they'll illustrate a good reason why the Republicans wouldn't be inclined to fund the Department of Justice.

          You could but then again I could just trot out the bananas can't be considered oranges.

          I hate to be the one to break it to you, but the reason politicians love to underfund enforcement is to offset the showboat regulations that they pass in order to be re-elected. This way they said they passed laws that are designed to protect us from harm, while at the same time the chances of that law actually being used is low enough not to piss off the people who actually fund the politicians campaigns.

          Pointing to incompetence or the occasional misstep brought on by the underfunding of enforcement as an example of why we should fund government law enforcement is part of their plan. You don't actually think they would point out the overwhelming majority of things that the government does right? That would discredit the fairytale that they are trying to sell you.

          This is why the republicans in particular have been doing a shitty job. If the government is seen as doing the right thing then they wouldn't have a platform to run on. The number one reason that a republican filibusters every single bill of significance is to prevent the democrat president from looking good. Never mind that shitty legislation was passed with overwhelming support when there was a republican president. During the Bush years the attitude of the republicans was that it was okay to borrow money in order to keep taxes low because the interest being paid was offset by the nation's GDP. The day after a democrat is president, those same republicans immediately are concerned that we are borrowing too much money and selling our children to China. The amount of hyperbole that is spewed is ridiculous.

          I just find it laughable that someone would vote for a candidate that is more concerned with what would make his party look good than what is good for the nation. One key sign that this is taking place is the more they try to hurt the country to prop themselves up, the more they wrap themselves in the American flag and claim to be patriotic.

          Beware of the politician that campaigns on the platform that government sucks and reelect him and he'll keep it that way.

        • Nice strawman. I can make one too, how's this:
          You're an IT consultant on a team of IT consultants, due to cutbacks your team has dwindled to you and one other guy, and the company sold 40% of your networking hardware.

          Will your network perform as well as it did pre-cuts? Now that you're working double shifts will your work output be of the same *quality* as pre-cuts?

          People who always complain that departments or anyone isn't doing a good enough job after their resources were cut as an excuse to cut mo
        • Re:Wait a minute... (Score:5, Informative)

          by DeadCatX2 (950953) on Tuesday October 09, 2012 @11:04AM (#41596673) Journal

          Here, you have a pretty much cut and dry case. ATF agents allowed roughly two thousand fairly high quality guns to pass to Mexican drug cartels with no attempt made to track those weapons

          From what I read it's not really that cut and dry. The officials involved DID want to track the guns and did try, but the bureaucracy did them in.

          http://features.blogs.fortune.cnn.com/2012/06/27/fast-and-furious-truth/ [cnn.com]

      • I think that both of you are missing the essential mater. While it's true that the SEC reserves criminal prosecution for the most egregious cases, relying more upon fines and plea bargaining, it can also be argued, and indeed it has been, that this general strategy really is the most effective use of limited taxpayer resources; allowing the most correction to be achieved for the tax monies spent. Sure, you could increase the enforcement budget of the SEC and expand the number of prosecutors, investigators a
      • So, this brokerage was set up as a flag of convenience fifteen years ago and, to all appearances, operates as a loose federation of unchecked agents. One broker is charged with defrauded his clients, assigning all profitable trades to his wife, and all losses to the client. Another gets busted in a massive Ponzi scheme involving retirees and refinancing. Only when they're on the ropes does the SEC come looking at their IT operation, outsourced, from what I can see in the article, via an obvious conflict of
  • by techsurvivorman (2747221) on Monday October 08, 2012 @11:37PM (#41593215)
    I say Sabotage. I'm presently a NOC engineer at an IT managed services provider. Before, I worked for a well-known financial market data provider. The most demanding client we have is a financial company. Everyone once in a while, they get unhappy with our service for whatever reason and decide to blast the blame-thrower. During the most recent hissy-fit episode, they threatened to not renew the service contract. Moreover, their CIO dropped in on the conference call and said not only are they not gonna renew the contract but he was gonna have us blacklisted with other financial companies that we were looking to grow business with. It's been my general impression that financial clients tend to be some of the most high maintenance, demanding, and nasty assholes. I've a hunch that a similar reason could be a factor In explaining this network engineer's actions.
  • Just for fun... (Score:4, Informative)

    by Anonymous Coward on Monday October 08, 2012 @11:46PM (#41593257)

    Go to http://www.reveregroup.com/ [reveregroup.com] and search for anything in the top right search box. You'll get a licensing error. These guys are on the ball...

    • Or how about the fact that they promote their non existent twitter profile on their main page:

      https://twitter.com/revere_group [twitter.com]

    • by Alex Belits (437) *

      Error Message: The license does not allow the use of this search interface.

      lol

      Use the Coveo search box inserted in the upper-right corner

      wtf

      of your Sharepoint sites.

      BWAHAHAHAHAHAHAHAHA!!!

    • While it's not as out-and-out broken as their search box or twitter link, I also like their main page selection. Because everybody wants web navigation that induces motion sickness! Complete with mystery meat selections, too.

  • Why would senior network engineer need to send traffic home to verify his routing patterns? Yeah right, he scammed millions and they covered it up to avoid more fines. Now, he and his red stapler, are at some beach resort complaining about the Mai Tais.

  • by Stiletto (12066) on Tuesday October 09, 2012 @12:47AM (#41593505)

    Over a period of roughly seven business days, traffic had slowed to a crawl at the Tampa, Fla.-based firm, which had outsourced its IT department to The Revere Group. GunnAllen's acting CIO, a Revere Group partner, asked a member of the IT team to investigate.

    Well, here we go! The CIO of the company outsourced the IT department to..... his own personal company. No conflict of interest there!

    • Not his own personal company; he was a Revere Group employee. At one point in the narrative one IT minion discusses how he went to the CIO's Revere Group superiors. When they outsourced IT they outsourced the CIO position along with it.

    • by Bryansix (761547)
      This is a common trick to guarantee income stream. If the company you are running has no income, tell them you are being nice and take zero salary. At the same time outsource their biggest cost to... yourself. Constant revenue stream.
  • by Joe_Dragon (2206452) on Tuesday October 09, 2012 @01:07AM (#41593563)

    Unions can be a big help in stopping BS like this from happening.

    When you have people purposefully break things just to look good for the bosses that's bad even worse is sweeping security and other issues under the rug.

  • by HangingChad (677530) on Tuesday October 09, 2012 @03:55AM (#41594031) Homepage

    It's hard reading IT train wreck stories, especially when the damage is self-inflicted. And yet I saw that same attitude, on both sides of the transaction, acted out over and over.

    A long time ago a CIO I worked for said he wasn't worried as long as he had a throat he could choke if things went sideways. The only thing he cared about was having somewhere to cast blame.

    Those were the days I naively cared about doing a good job.

    • by dbIII (701233) on Tuesday October 09, 2012 @06:21AM (#41594469)

      A long time ago a CIO I worked for said he wasn't worried as long as he had a throat he could choke if things went sideways

      There seems to be a lot of that attitude with the cloud outsourcing. I put an example up here earlier of 25k email accounts inaccessible for a week due to a DNS typo and a long job queue to do the two second fix, but people seemed to think it was OK to have that so long as there was someone else to blame. In that case it was Microsoft doing the hosting so good luck in getting anywhere with blaming them, a customer with twenty-five thousand email accounts is ignorable small fry and legal action is pointless.

      • In that case it was Microsoft doing the hosting so good luck in getting anywhere with blaming them, a customer with twenty-five thousand email accounts is ignorable small fry and legal action is pointless.

        Having someone to *blame* doesn't necessarily mean having someone to *sue*. It's about keeping your job, not getting legal recompense.

    • Re: (Score:3, Insightful)

      The five stages of IT projects: 1. Wild Enthusiasm 2. Cold Reality 3. The Hunt for the Guilty 4. Bayoneting the Wounded 5. Promoting the Absent
  • by whitroth (9367) <whitroth@@@5-cent...us> on Tuesday October 09, 2012 @01:00PM (#41597963) Homepage

    I, too, love that they outsourced their IT - they got what they apparently deserved.

    But then there's the part in the article where it doesn't appear that before things came down that they'd *never* been audited.

    Oh, that's right, most of this happened between '01 and '08, when Bush & Cheney were in charge, and All Republicans Love Deregulation, and if you can't deregulate, strangle the budget of the regulating agency so they can't do their job.

    And before you libertarians here jump on me, tell me what you would have done if *you* had invested with them.

                          mark "that's right, you *ain't* rich, or you wouldn't be spending time reading comments on slashdot"

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