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The case has aspects similar to the prosecution of Adrian Lamo, dubbed the Homeless Hacker, for breaching systems at the New York Times. Lamo would frequently seek out vulnerabilities in online systems, exploit the vulnerabilities to gain proof of the flaws, and then contact the company - and a reporter - to help close the security hole. In 2004, Lamo pleaded guilty to compromising the New York Times network, served six months under house arrest and had to pay $65,000 in restitution.

In the University of Southern California case, McCarty identified the vulnerability in the USC system when he decided to apply to the school and, before registering, used a common class of flaws known as structured query language (SQL) injection to test the site, he said during last week's interview. Such attacks exploit a flaw in the code that processes user input on a website. In the USC case, special code could be entered into the username and password text boxes to retrieve applicants' records, according to the FBI's affidavit.

USC administrators initially claimed to SecurityFocus that an analysis of the system and log files indicated that only two database records could be retrieved using the SQL injection flaw. After additional records were provided to the administrators, the university acknowledged that the entire database was threatened by the flaw. The FBI's affidavit contains the email that McCarty allegedly sent to SecurityFocus with two additional records from the database.

The events outlined in the affidavit indicated that McCarty tried to act responsibly, said Jennifer Granick, a cybercrime attorney and executive director of the Stanford Law School's Center for Internet and Society.

"Here is a guy who didn't use the information, he notified the school - albeit through a third party - what was he supposed to do differently?" Granick said. "It's a Catch-22 for the security researcher, because they have arguably broken a law in finding the flaw."

The case does underscore that researchers will have to become more savvy about dealing with the legal aspects of their craft, said David Endler, director of security research for 3Com subsidiary TippingPoint.

"Finding a vulnerability in a website is a bit different than finding a vulnerability in a product. You can do a lot of things to a product that won't affect users. You shouldn't poke around a website unless you have permission or have been hired to do it...it's just not worth it."

As the creator of two vulnerability-buying programs, Endler is familiar with the contorted legal issues that can sometimes face vulnerability researchers. He believes that cases, such as McCarty's prosecution, will likely lead to researchers either allying themselves with one of the flaw-bounty programs or declining to disclose any discoveries.

Already, the influence of corporate legal teams had reduced the significance of the vulnerability disclosure movement, Immunity's Aitel said.

"The peak of disclosure has long past us," he said. "Who out there is really giving away bugs these days? The disclosure movement passed us by more than two years ago and people have gone underground with their bugs."

And having fewer security researchers looking over the shoulders of website administrators and internet software makers will only mean less pressure to fix vulnerabilities and weaker security for sites on the internet, the EFF's Tien said.

"There is an under-disclosure of vulnerabilities and weaknesses, and that is bad thing for security, because the less people know about security problems, the less pressure is put on companies to improve security," Tien said.

Author's note: As described in the article, the FBI's affidavit supporting the charge against Eric McCarty of computer intrusion alleges that he was the source for an article published on SecurityFocus by the author. The author did not cooperate with the FBI's investigation nor was he asked to do so. In an interview conducted on Friday and in an email exchange, McCarty provided proof that he was the author's source and waived the condition of anonymity that he requested for the original article.

This article originally appeared in Security Focus.

Copyright © 2006, SecurityFocus

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