You have been assigned to support the Padgett-Beale Merger & Acquisition (M&A) team working under the direct supervision of Padgett-Bealeâ€™s Chief Information Security Officer (CISO). The M&A team is in the planning stages for how it will integrate a new acquisition, Island Banking Services, into the company as its financial services arm (PBI-FS). Initially, PBI-FS will function as a wholly owned subsidiary which means that it must have its own separate cybersecurity program.
Your first major task (Project #1) will be to help develop a Cybersecurity Strategy & Plan of Action for PBI-FS. Island Banking Services never had a formal cybersecurity program so youâ€™re starting from scratch. You will need to research best practices as well as relying heavily upon what you learned in your undergraduate studies in Cybersecurity Management and Policy. The CISO has provided detailed instructions for this task. (These appear after the Background section below.)
After five years of operation, Island Banking Services — a non-U.S. firm — was forced into bankruptcy after criminal money laundering charges were filed against the company and its officers. Padgett-Beale, Inc. purchased the digital assets and records of this financial services firm from the bankruptcy courts. The purchased assets include licenses for office productivity software, financial transactions processing software, database software, and operating systems for workstations and servers. Additional assets included in the sale include the hardware, software, and licensing required to operate the companyâ€™s internal computer networks.
Figure 1. Island Banking Services IT Infrastructure Purchased by Padgett-Beale, Inc.
Padgett-Bealeâ€™s legal counsel successfully negotiated with the bankruptcy court and the criminal courts for the return of copies of the companyâ€™s records so that it could restart Island Banking Serviceâ€™s operations. The courts agreed to do so after Padgett-Beale committed in writing to reopening the customer service call center (but not the branch offices) on the island. Reopening the call center will provide continued employment for 10 island residents including 2 call center supervisors. Padgett-Beale intends to relocate the call center to a company owned property approximately 10 miles away from the current location and adjacent to a newly opened Padgett-Beale resort.
Padgett-Bealeâ€™s Risk Manager has recommended that the Merger & Acquisition plan be amended such that Island Banking Services would be operated as a wholly owned subsidiary for a period of 5 years rather than being immediately and fully integrated as an operating element of Padgett-Beale. The companyâ€™s attorneys agreed that this would be the best approach given the potential for additional legal troubles related to the actions of the previous owners and employees. The Board of Directors has signed off on this amendment to the M&A plan and stipulated that the new subsidiary will be named PBI Financial Services (PBI-FS). The company officers and senior managers for PBI-FS will be named at a later date. For now, the leader of the M&A Team will serve as the Chief Operating Officer. Padgett-Bealeâ€™s Chief Information Security Officer will be loaned to PBI-FS while a search is conducted for a dedicated CISO for the subsidiary.
The CISO has given you and your team mates a set of instructions (below) which you should follow as you complete this task.
If you have not already done so, read the Background information in this file. Next, review the Padgett-Beale M&A Profile 2020 which was posted to the LEO classroom. You should also review all materials from the classroom for Weeks 1 â€“ 4 as these provide needed information about the Financial Services industry and the legal and regulatory requirements which apply to this industry.
Using the information available to you, determine the most likely information technology/security gaps which existed at Island Banking Services prior to its being acquired by PBI. Next, determine which of these, if not addressed, will likely exist in the newly formed subsidiary PBI-FS. Document your analysis and evaluation in a Gap Analysis.
Your Gap Analysis should address operating issues relating to confidentiality, integrity, and availability (CIA) of information, information systems, and information infrastructures owned or used by PBI-FS. Your analysis should also consider and use the People, Process, and Technology framework.
Step 1: Identify 10 or more significant cybersecurity issues/challenges/risks which the background information and M&A profile indicate currently exist at PBI-FS / Island Banking Services. You are allowed to â€œread between the linesâ€ but must be able to map your analysis and findings to specific statements from these documents. These items will become your â€œGapsâ€ for the Gap Analysis. Use one or more cybersecurity frameworks or standards (e.g. NIST CSF; People, Processes, and Technologies; Confidentiality, integrity, availability) to organize your analysis.
Note: there was significant criminal behavior found at Island Banking Services. Your analysis must address internal weaknesses which allowed this to occur without being discovered by the employees who were not involved in the crimes.
Step 2: Using your Gap Analysis (step 1) create a Risk Register in which you list 10 or more specific and separate risks. For each risk, assign a category (confidentiality, integrity, availability, people, process, technology) and a severity (impact level using a 1 â€“ 5 scale with 5 being the highest potential impact).
Step 3: Review the laws and regulatory guidance which apply to the Financial Services industry and companies like Island Banking Services. For each entry in your risk register, identify and record the laws, regulations, or standards which provide guidance as to how the identified risks must be addressed or mitigated. Record this in your risk register.
Step 4: Review laws and regulations which apply to all companies, i.e. Sarbanes Oxley, IRS regulations for Business Records, SEC regulations and reporting requirements, etc. Review your Risk Register and either map these requirements to existing entries in your risk register or insert new entries for significant legal or regulatory requirements which you were not able to map to your previously identified risks. (Include risk related to non-compliance.)
Step 5: Review section 1.2 Risk Management and the Cybersecurity Framework in the NIST Cybersecurity Framework v1.1 (https://â€Œnvlpubs.nist.gov/â€Œnistpubs/â€ŒCSWP/â€ŒNIST. â€ŒCSWP. â€Œ04162018.pdf)
Using this information, determine the best strategy for addressing (â€œtreatingâ€) each of your identified risks. Remember the four types of risk mitigation strategies (accept, avoid, control, transfer).
Consider the business impact for each of your mitigation strategies (e.g. if you applied an â€œavoidâ€ strategy across the board, the company would not be able to operate in the financial services industry because it would need to shut down all operations).
Record your risk mitigation strategy for each risk in your risk register. For each of your â€œcontrolâ€ entries, include the corresponding control category and subcategory (if applicable) from the NIST Cybersecurity Framework (see Tables 1 and 2 in version 1.1). Examples: ID.AM Asset Management or PR.AC Identity Management
and Access Control. Remember to cite your sources.
Step 6: Develop a Cybersecurity Strategy that presents five or more specific actions (strategies) that the company should take to implement your recommended risk mitigations. Include information from your gap analysis, legal and regulatory analysis, risk analysis and proposed risk mitigations. Under each strategy include information about how the strategy will affect or leverage people, policies, processes, and technologies (hardware, software, infrastructure). Include examples and other pertinent information about Island Banking Services and Padgett-Beale. You should have at least one technology related strategy which includes an updated Network Diagram. This diagram must show the to-be state of the IT infrastructure including recommended mitigating or â€œcontrolâ€ technologies, e.g. intrusion detection, firewalls, DMZâ€™s, etc. (start with the diagram provided in this assignment file).
Note: Your strategy will be presented to the Board of Directors by the executive who is leading the Merger & Acquisition Team so make sure that you write in appropriate language and include sufficient detail to explain your recommended strategy.
Step 7: Develop and document a proposed plan of action and implementation timeline that addresses each element of the cybersecurity strategy that you identified previously (in step 6). Provide time, effort, and cost estimates for implementing your recommended actions (include appropriate explanations of your reasoning). Include the resources (people, money, etc.) necessary for completing each task in the timeline.
Step 8: Develop a set of 5 or more high-level summary of recommendations regarding the next steps to take in mitigating the risks that you identified in steps 1-7. These recommendations should logically flow from your analysis and be supported by your Cybersecurity Strategy and Plan of Action.
The Cybersecurity Strategy and Plan of Action is a comprehensive MS Word document that includes a separate title page followed by the six major elements (see list under step 7) and ending with a reference list. Your document must include a reference list and appropriate citations throughout. You will need 10 â€“ 12 pages to fully document your strategy and plan. Use section headings and sub headings to organize your work. You may use internal title pages (section titles) to make it clear where each of the major elements begins and ends. Title pages and reference pages are not included in the recommended length.
The Recommendation Memo is a 2 page, professionally formatted memorandum addressed to the Merger & Acquisition Team. This cover letter / memo should summarize why this package is being forwarded to the M&A team for â€œreview and action.â€ The memo should introduce and provide a brief summary of the purpose and contents of the Cybersecurity Strategy and Plan of Action (name and describe each of the major sections). Use a professional format for your memo (consider using one of the MS Word templates). The memo does not include citations or references but, you may need to name laws or regulations.
Your diagram must be based upon the provided network diagram with additions or deletions that are clearly your own work. You may use MS Wordâ€™s drawing tools, Power Point, or other drawing program. When you have completed your diagram, you may find it helpful to take a screen snapshot and then pasted that into your deliverable file(s).
You may use commercial or â€œfreeâ€ clip-art to represent individual end point devices or network appliances such as routers, firewalls, IDPS, etc.) Clip art does not need to be cited provided that it is clip art (not screen captures from another authorâ€™s work).