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Another insurance giant loses a court battle over cyber-related claims. A busy Defense Department contractor is dealing with a ransomware incident. And Microsoft announces an Xbox hacking program. This is CyberScoop for Friday, January 31.

Court rules AIG must cover $6 million in losses for scam victim

A judge in the Southern District of New York ruled Wednesday that AIG was in breach of contract when it previously denied a claim from SS&C Technologies, a $6 billion financial technology firm. Suspected Chinese hackers carried out a business email compromise attack against SS&C, resulting in years of litigation that only ended Wednesday. This case is only the latest example of a cyber-related dispute between an insurer and client going to court. Jeff Stone has the story.

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Ransomware strikes Pentagon contractor

Electronic Warfare Associates, a government contractor that works with the departments of Defense, Justice and Homeland Security, has been hit with a ransomware attack. EWA’s CEO and president, Carl Guerreri, told CyberScoop Thursday: “I don’t want to give out any details for security reasons,” adding that the company is “coordinating with law enforcement.” Guerreri claimed he doesn’t know how much the attackers demanded, and said EWA has no intention of paying up. The attack could indicate attackers are shifting their focus from local and state governments and schools to higher value targets. (EWA supports the government’s efforts in electronic warfare, cyber defense, tactical mission planning, and force protection.) Shannon Vavra has more context.

DHS, states hold cyber exercise ahead of Iowa caucuses

Just days before Iowans go to the polls to choose a Democratic presidential candidate, state and local officials from around the country have been in Washington, D.C., simulating their response to a possible cyberattack. The tabletop exercise, held at a meeting of the National Association of Secretaries of State on Thursday, harped on the threat of disinformation, for instance. State and local officials said they welcomed the opportunity to practice foreign interference in the 2020 election, a threat that’s been a major theme of warnings from the intelligence community. Meanwhile, also on Thursday, a government-industry coordinating council voted to update guidelines by which DHS officials would notify state and local officials of cyber incidents, so state officials, rather than just local administrators, are aware of any hacking of election infrastructure. The change brings DHS policy in line with the FBI’s approach. The feds have practiced for all this before.

Microsoft offers $20,000 for Xbox bugs

The company on Thursday announced a bug bounty program that offers rewards to security researchers, gamers and technologists who report vulnerabilities in Xbox’s network and services. Submissions that demonstrate a proof-of-concept are eligible for rewards of between $500 and $20,000, depending on the severity of the vulnerability. Unveiling a bug bounty program meant specifically to identify flaws in Xbox’s network and services comes after hackers have spent years working to disrupt the popular gaming system. The hacking group known as Lizard Squad, for instance, made its name in part by launching attacks on the Xbox network on Christmas Day, when gamers receive new systems, while others have made a sport out of stealing prominent user accounts. Jeff breaks it down.

Cyber is at the heart of the new Navy, boss says

Acting Secretary of the Navy Thomas Modly said Wednesday he plans in a “couple days” to submit to the secretary of Defense his plan to build the Navy of the future, which will rely heavily on improved IT communications and cybersecurity on ships. Modly stressed the need to think beyond just ships in the Force Structure Assessment, the Navy’s plan to grow its fleet to 355 vessels up from the roughly 290 it has today. Cybersecurity is an emerging domain of warfare that Modly said he is focused on, particularly as the Navy has struggled with cybersecurity, stinging reports have found. The Indo-Pacific is “a maritime, space and cyber theater,” he said at a Center for Strategic and Budgetary Analysis event. Jackson Barnett covered it for FedScoop.

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