Threats to cybersecurity and data privacy are constantly increasing both in volume and complexity.  This trend is expected to continue in 2022.  In a bid to protect cybersecurity and ensure data is properly safeguarded, countries around the world are introducing new laws focused on cybersecurity and data protection.  Armed with new legal frameworks, regulators and law enforcement are placing onerous obligations on organisations who fall victim to cybersecurity breaches.  There are shorter deadlines in which to notify the authorities of data breaches and ever increasing fines and penalties for businesses that fail to respond swiftly and appropriately to a cyberattack.

In this ever-changing area what is on the horizon for 2022?

Continue Reading Cybersecurity and Data Privacy – What to expect in 2022

On Nov. 4, the Department of Defense announced significant changes to the Cybersecurity Maturity Model Certification program, intended to simplify the certification standard and prioritize protection of certain types of controlled defense information.

Read on for an overview of the changes, a timeline for their implementation and implications for defense contractors.

Amazon’s financial records have revealed that the Luxembourg data protection supervisory authority, the Commission Nationale pour la Protection des Données (“CNPD”), is fining the retailer’s European arm (Amazon Europe Core S.à.r.l.) an eyewatering 746 million euros (£636m or $838m) for breaches of the EU’s General Data Protection Regulation (“GDPR”).

When the GDPR was introduced in May 2018, the potential for huge financial sanctions grabbed many headlines: it gives European supervisory authorities the power to impose fines of up to 20 million euros or 4% of annual global turnover (whichever is greater) for breaches of the GDPR. There have been some undeniably sizeable fines issued under the GDPR in the last three years. But the level of this particular fine is extraordinary: it’s the largest GDPR fine issued to date by a considerable margin. The second largest fine ever imposed under the GDPR was a comparatively paltry 50 million euros, levied against Google by CNIL (the French supervisory authority) in early 2019 (which you can read about here).

Continue Reading CNPD v. Amazon, the largest GDPR fine on record – what do we know so far?

New York City’s recently enacted biometric privacy law took effect July 9, 2021. While the law is vague as to exactly who must abide by certain subsections, it is undoubtedly consumer-focused. However, even if employers escape New York City’s biometric ordinance, a looming New York state law may soon impose more expansive biometric requirements on

Yesterday, the Supreme Court resolved a circuit split on the scope of the Computer Fraud and Abuse Act of 1986 (CFAA) in a decision that emphasizes the importance of how organizations manage access to their systems.  Employees with access to information at work sometimes access that information with improper motives, and in violation of office policies.  This inappropriate use of access has led to federal criminal prosecution for some.  In Van Buren v. United States, No. 19-783, the United States Supreme Court held that the CFAA is not properly applied to justify those prosecutions.

Nathan Van Buren was a police officer who accepted $6,000 from Andrew Albo, a participant in an FBI sting operation, to search a police database to determine whether a woman Albo professed interest in was an undercover police officer.  Van Buren ran a search for the woman’s license plate in the Georgia Crime Information Center database.  For doing so, Van Buren was charged and convicted of violating the CFAA, because he had “exceeded” his authority to access that database.

Continue Reading Federal Law Won’t Protect Your Organization from Bad User Access Control Practices

On May 12, President Biden signed an executive order mandating that the federal government significantly improve cybersecurity within its networks and modernize federal cyber defenses. This move follows a series of cyberattacks on private companies and federal government networks over the past year, including a recent incident that resulted in gasoline shortages along the U.S.

On April 14, 2021, the United States Department of Labor (the “DOL”) issued for the first time guidance to retirement plan sponsors, fiduciaries, record keepers, service providers and plan participants guidance on cybersecurity issues. The DOL’s press release includes three pieces of guidance, including: (1) Tips for Hiring Service Providers; (2) Cybersecurity Program Best Practices; and (3) Online Security Tips.

The Employee Benefits Security Administration, a sub-agency of the DOL (the “EBSA”) long ago stated that addressing cybersecurity has been on the agency’s “to do” list and even published a report in 2016 reflecting the need for such guidance, which we previously covered here.

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), includes fiduciary standards that require a retirement plan to be administered in accordance with a standard of care for a prudent person who is familiar with such matters. Common sense dictates that ERISA fiduciaries administer their plans in accordance with industry standards for cybersecurity, safeguard plan assets and ensure that appropriate controls are in place to avoid financial losses to plans that may result from a cybersecurity breach. However, the legal issues concerning who is responsible (plan participant, plan sponsor or record keeper) remain open questions in many jurisdictions.

Continue Reading DOL’s New Cybersecurity Guidance

The technology sector runs the gamut from artificial intelligence (AI), the Internet of Things (IoT) to SaaS companies or cybersecurity, and from the biggest household names to the smallest companies being operated out of garages. The rise of AI and traps for the unwary were previously covered here.  Risks of investing in SaaS Solutions can be found here and here.  Technology is everywhere in 2021, even in the smallest brick and mortar shops around.  Technology investing offers lucrative opportunities for investors large and small, but there are many traps for the unwary, such as “zero-day exploits.”

Continue Reading Tech Investing Part 1: Zero Hour

Information security is critical to the operation of the financial markets and the confidence of its participants. . . The Division is acutely focused on working with firms to identify and address information security risks, including cyber-attack related risk . . .” SEC Division of Examinations, 2021 Examination Priorities, at 24.

On March 3, 2021, the Securities and Exchange Commission’s newly renamed Division of Examinations (EXAMS) (formerly the Office of Compliance Inspections and Examinations (OCIE)) announced its 2021 examination priorities.  Information security and operational resiliency ranked number two out of the top five priorities sending a clear message that the SEC is focused on emergent security threats, particularly cyber-attacks, resulting from the sudden and unprecedented increase in remote operations.

Continue Reading SEC Announces 2021 Information Security Examination Priorities – Five (5) Steps Every Firm Should Take to Prepare!

On March 2, 2021, Governor Northam signed into law Virginia’s own Consumer Data Protection Act (“Virginia CDPA” or the “Act”), a bill that brings together concepts from the EU’s General Data Protection Regulation (GDPR) as well as the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA). It is the first of its kind legislation on the East Coast. The law will go into effect on January 1, 2023.

The drafters of the Virginia CDPA appear to have benefited from observing the pitfalls and problems that arose in the development and implementation of both GDPR and CCPA. The Virginia bill deftly avoids several of those by incorporating narrower, more tailored definitions that clearly exclude categories of data and businesses over which there was (and continues to be) some confusion with respect to both the EU/UK and California compliance regimes. It also adopts, in concept, the framework of the GDPR, and even some of its language. Like GDPR, it characterizes the party who initially collects and controls personal data as the “controller” and obligates that party to be a good steward of the data, through transparency with the consumer, accountability for sharing the data with third parties (“processors”), and a duty to implement appropriate data security to safeguard the data. It will be enforced by the Virginia Attorney General. Notably, there is no private right of action under the Act.

Continue Reading Virginia’s New Consumer Data Protection Act (CDPA)