On July 21, the New York Department of Financial Services (NYDFS) filed charges against First American Title Insurance Company (First American) for violating multiple sections of the New York Cybersecurity Regulation,  23 NYCRR 500.00, et seq.  The significance of the NYDFS enforcement action cannot be overemphasized.  This is the first action filed under the Cybersecurity Regulation, signaling a more aggressive enforcement stance by the regulator.  The good news is the filings provide important guidance on best practices and red flags to avoid agency sanctions.

The NYDFS Statement of Charges alleges that First American knowingly exposed tens of millions of documents containing consumer sensitive personal information (e.g., bank account numbers, bank statements, mortgage records, Social Security numbers, wire transaction receipts, drivers’ license images, etc.). The charges further allege that for almost 5 years (from October 2014 through May 2019) these records were available on First American’s public-facing website to anyone with a web browser.  The fact that First American failed to remediate the vulnerability, even after it was discovered by a penetration test in December 2018, was particularly troublesome for the regulators.  The charges state that, “Remarkably, [First American] allowed unfettered access to the personal and financial data of millions of its customers for six more months. . .”   Clearly, the NYDFS found this treatment of sensitive consumer data unconscionable and that First American demonstrated a total disregard for the Cyber Regulations.


Continue Reading NYDFS State of Mind: Regulator Focus and Enforcement Trends

Artificial intelligence (AI) refers to the ability of a computer or a computer-enabled robotic system to process information and produce outcomes in a manner similar to the thought processes of humans in learning, decision making and problem solving.  As a result of rapid advances in AI, pre-pandemic, McKinsey Global Institute estimated that between 75 and 375 million people around the world will need to change jobs or acquire new skills by 2030.  AI both holds promise of innovation and disruption, as does the legal framework that is developing to rein in its risks without hindering its progress.

In May 2019, the US Government joined the OECD (Organisation for Economic Co-operation and Development) in setting forth principles to improve the innovation and trustworthy development and application of AI.  At the same time, the bipartisan Artificial Intelligence Initiative Act (AIIA) was introduced in the US Senate to organize a national strategy for developing AI and provide a $2.2 billion federal investment over five years to build an AI-ready workforce, accelerating the delivery of AI applications from government agencies, academia, and the private sector over the next 10 years.


Continue Reading The Evolving World of AI

On March 11th, 2020, Virginia Governor Northam signed the Insurance Data Security Act (the “Act”) — HB 1334 — imposing requirements on all entities regulated by the Virginia Bureau of Insurance (“BOI” or the “Bureau”) to:

  • maintain an information security program,
  • investigate all cybersecurity events,
  • notify the Commissioner of Insurance of cybersecurity events, and
  • notify consumers affected by cybersecurity events.


Continue Reading The Virginia Insurance Data Security Act – What You Need to Know

The global coronavirus pandemic continues on, and the cyberattacks and scams continue to multiply.  In the midst of the pandemic, hackers are capitalizing on fears surrounding the outbreak by crafting COVID-19-themed attacks aimed at infecting computers with malware or obtaining sensitive, personal information.  Below are some of the latest examples of attacks and vulnerabilities to be aware of:

Continue Reading Update: Coronavirus Cyberscams and Other Attacks – Scammers Are Still at It

While businesses grapple with the COVID-19 crisis, data privacy and data security regulation remains a pressing concern.  Some significant state laws regarding data privacy and security have gone into effect in 2020, such as the California Consumer Privacy Act (“CCPA”) (effective January 1, 2020) and the New York Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”) (effective March 21, 2020).  Regulator expectations for compliance with these new legal requirements seem immune from the virus that has placed strains on business operations and employees responsible for understanding and operationalizing new business processes to comply with these new legal requirements.

As resources are strained and employee focus is diverted to the evolving and unforeseen business demands in addressing COVID-19, the need for focus on data privacy and security appears even greater.  Read on for three data security and privacy recommendations when handling COVID-19 related disruptions to business.


Continue Reading Three Cybersecurity and Privacy Recommendations When Navigating COVID-19

Since the outbreak of COVID-19, the Department of Health and Human Services Office for Civil Rights (OCR) has issued various guidance documents on compliance with the Health Insurance Portability and Accountability Act of 1996 and its regulations. The topics include OCR’s discretion in enforcing HIPAA with respect to telehealth services, waiving hospital compliance with the HIPAA Privacy Rule in limited circumstances, and Privacy Rule compliance in the absence of specific waiver. The OCR guidance, discussed below, confirms that HIPAA still applies during the pandemic but compliance may be relaxed in certain situations to allow healthcare providers to respond effectively to the current public health emergency.

Continue Reading HHS Limited Waiver and Guidance on HIPAA and the Privacy Rule During COVID-19 Pandemic

The New York Department of Financial Services (“NYDFS”) has issued a series of Industry Letters requiring regulated institutions to submit information regarding plans to manage risks associated with the novel coronavirus (“COVID-19”).  The Letters request descriptions of the entities’ planned responses to a variety of threats posed by COVID-19, including heightened cybersecurity risks.

The four Industry Letters issued by the NYDFS are directed to various regulated entities and require responses regarding the entities’ prospective responses to COVID-19.  Among the required responses are those regarding the regulated entities’ strategies to address specific cybersecurity-related risks, including:


Continue Reading NYDFS Seeks Assurances from Regulated Entities in the Wake of COVID-19

“[P]rivacy legislation should have some kind of safe harbor provision in it so that companies understand that if they take certain steps, what they are doing is consistent with the law.”  Karen Zacharia, Chief Privacy Officer at Verizon

The California Consumer Privacy Act (CCPA) provides unparalleled rights for California residents with regard to data privacy.  The CCPA contains an expansive definition of “personal information” and establishes completely new data privacy entitlements for California consumers, including rights to access, delete and opt-out of the sale of personal information.  In addition, the CCPA provides new statutory damages and consumer private rights of action in the event of a data breach.


Continue Reading Industry Insight: The CCPA’s Elusive “Reasonable Security” Safe Harbor

For years, we have waited with bated breath the arrival of the “Internet of Things” (IoT) to transform garages into smart factories, cars into autonomous vehicles and ordinary homes into smart homes completely controllable by cellphones. Two technologies underpinning this world of the future (inexpensive sensors and 5G networking) will catalyze this vision in 2020. Gartner predicts that connected devices will rise from 8.4B in 2017 to 20.4B in 2020. While the hurdles for this vision are many (increased regulation, privacy concerns, and the trade war, which may bifurcate the IoT due to geopolitical disputes regarding 5G), the McKinsey Global Institute estimates that IoT technologies will create between $3.9T and $11.1T in economic value globally by 2025. Those interested in capitalizing on this world of the future should be mindful of the legal framework of the future (and near present).

Continue Reading The IOT is Here and so is the Regulation

While customer data breaches are garnering a lot of media attention, a subtler but equally problematic cybercrime is slowly on the rise — domain spoofing.

In this context, cybercriminals register domain names that are virtually identical to an entity’s legitimate domain name and/or brand, often with subtle misspellings or the addition of business designations or generic words describing the entity’s business. The false domain names are so similar to a company’s actual domain and/or brand that they appear legitimate.

The cybercriminals then use the deceptively similar domain name to create email addresses and send emails impersonating a company or its employees, sometimes using the names of the entity’s actual employees — a tactic commonly called “email spoofing.” Those emails typically contain malware in links or attachments, which are triggered by clicking the link or opening the attachment. Other email spoofing schemes attempt to trick recipients into providing login credentials, providing payment card information, or routing wire transfers to the cybercriminal’s bank account.


Continue Reading *Chime* It’s an Email from Your Favorite Outside Counsel, or Is It?