Cybersecurity / Data Security

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Key Takeaways

1. New cybersecurity measures and requirements are introduced by the EU for companies.

2. Contractual provisions with the supply chain may need to be revised.

3. High penalties and liability for management, including personal liability.Continue Reading The NIS2 Directive is on the Edge of Enforcement: What Now for EU/US Companies?

“Browsing and location data are sensitive . . .. Full stop,” says the Federal Trade Commission. As is all granular data that can reveal “insights” that “can be attributed to particular people” through a “re-identification” procedure. This is one basis of complaints the FTC filed against Avast, X-Mode Social, and InMarket. A March 4, 2024 FTC blog post titled FTC Cracks Down on Mass Data Collectors: A Closer Look at Avast, X-Mode, and InMarket describes why these three companies’ collection of consumers’ browsing and location data raised concerns for the agency, and looks at two other data governance practices by those companies that also concerned the agency. All companies operating in the United States that collect and use consumer data should understand the themes emerging from the proposed settlements and orders and heed the admonitions from the agency moving forward.Continue Reading “Browsing and location data are sensitive . . .. Full stop”

On December 26, 2023, the Department of Defense (DoD) released the highly anticipated proposed rule for the Cybersecurity Maturity Model Certification Program (CMMC), a cybersecurity regulatory program that will likely impact most of the government contractor community. Every contractor who handles sensitive data such as Controlled Unclassified Information (CUI) or Federal Contract Information (FCI) during DoD contract performance will be covered by this regulation. While the CMMC program builds upon the security requirements included in Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012, CMMC will bring greater scrutiny to contractors’ cybersecurity compliance and potentially greater consequences for failure to comply in the era of the Department of Justice’s Civil Cyber Fraud Initiative and False Claims Act litigation. If finalized as proposed, the rule will significantly impact the CMMC regime, notably by requiring senior company officials to complete an affirmation for every CMMC level self-assessed or certified, thus increasing legal compliance risks.Continue Reading DoD’s New Year Resolution: A Cybersecurity Maturity Model Certification Program (CMMC) Proposed Rule

On October 30, 2023, the Securities and Exchange Commission (the “SEC”) filed a civil lawsuit charging SolarWinds Corporation (“SolarWinds” or the “Company”) and its chief information security officer, Timothy G. Brown (“Brown”), with securities fraud, internal controls failures, misleading investors about cyber risk, and disclosure controls failures, among other violations.  The SEC’s claims arise from allegedly known cybersecurity risks and vulnerabilities at SolarWinds associated with the SUNBURST cyberattack that occurred between 2018 and 2021.Continue Reading Uncharted Territory: The SEC Sues SolarWinds and its CISO for Securities Laws Violations in Connection with SUNBURST Cyberattack

The summer has been anything but slow in the People’s Republic of China. China is leaning into its regulation of emerging technologies, while attempting to strike a balance with its domestic economic priorities. In just the past few weeks, state authorities have issued a slew of draft measures and announced new initiatives – all with significant ramifications for businesses processing data within the PRC. From personal information processing to facial recognition to cross-border data transfers, what follows is a highlight reel of what you may have missed while you were away on vacation, with the comment period for many of these developments closing within the next few weeks.Continue Reading Catch Up Fast: The “Data Days” of Summer in China

On July 26, 2023, the SEC finalized long-awaited disclosure rules (the “Final Rules”) regarding cybersecurity risk management, strategy, governance, and incidents by public companies that are subject to the reporting requirements of the Securities Exchange Act of 1934.  While the end results are substantially similar to rules proposed by the SEC in March 2022, there are some key distinctions. Continue Reading Five Key Takeaways from the SEC’s Final Cybersecurity Rules for Public Companies

On 29 July 2019, the Court of Justice of the European Union (CJEU) issued a decision in the Fashion ID case, a case referred to it by a German court. In this blog post we will focus on what this case means with regard to joint controllership when you have social media plug-ins on your…

Concluding its investigation into the internal accounting controls of nine public issuers who were recent cyber fraud victims, the Securities and Exchange Commission (“SEC”), Division of Enforcement explicitly reminded issuers to consider cyber-related threats in developing and deploying their Section 13(b)(2)(B) internal accounting controls.

The SEC emphasized the importance of tailoring internal accounting controls to cyber-related threats, noting that cyber frauds like those carried out in the nine cases it investigated have caused “over $5 billion in losses since 2013, with an additional $675 million in adjusted losses in 2017.”
Continue Reading SEC Encourages Internal Accounting Controls to Guard Against Cyber Fraud

Responding to the rise of interconnected technology, the National Institute for Standards and Technology (NIST) has recently issued an introductory document in a planned series of cybersecurity publications addressing Internet of Things (IoT) privacy risks.  Open for comment through October 24, 2018, the Draft NISTIR 8228, Considerations for Managing Internet of Things (IoT) Cybersecurity and…

The federal government has kept busy this summer by issuing multiple regulations impacting government contractors’ cybersecurity.  First, the Department of Defense released the 2019 National Defense Authorization Act (NDAA), which included notable cybersecurity provisions involving foreign ownership and Controlled Unclassified Information (CUI), among others.  Second, Congress passed the NIST Small Business Cybersecurity Act requiring the…