Microsoft just publish KB Article 980088 [1] in response to the recently announced vulnerability in Internet Explorer. Microsoft confirms that it is possible for a malicious website to read files from the clients computer. All versions of Windows and Internet Explorer appear to be affected.

There is currently no patch for this problem. Microsoft advices users to set the Internet and Local Intranet security zone settings to "High". This will cause a prompt before running ActiveX Controlls and active scripting.

The attacker needs to know the file name. However, a typical target for this vulnerability would be a configuration file which is typically located at a predictable location.

[1] http://www.microsoft.com/technet/security/advisory/980088.mspx

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Johannes B. Ullrich, Ph.D.
SANS Technology Institute
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