Last week, the U.S. District Court for the Eastern District of Virginia ordered Capital One to produce a forensic investigation report in multidistrict litigation arising out of the cyber incident Capital One announced in July 2019. The court found that the report was not protected by the work product doctrine because Capital One had not shown that “but for” the litigation the report would not have been prepared in substantially the same form. The opinion offers some lessons for companies entering into arrangements with forensic experts in advance of cyber events.
Continuing its focus on COVID-19’s impact on its regulated entities, on April 13, the New York Department of Financial Services released new cybersecurity guidance in response to the COVID-19 pandemic. The guidance highlights the heightened cybersecurity risks from the current crisis and NYDFS’ expectations that its regulated entities address those risks as large portions of their workforce have shifted to remote working arrangements.
On March 11, the Word Health Organization officially characterized the coronavirus (COVID-19) outbreak as a pandemic. During the outbreak, many employers around the world are seeking to prioritize the well-being and safety of their employees by asking them to work remotely instead of risking exposure while commuting and working in populated office spaces. Organizations need to take into account increased risks to the security of their networks, systems, and data during this time.
Please join us in our London offices for a lively panel discussion with on what financial institutions and service providers need to know about cybersecurity and cyber incident preparedness. The panel will examine the key challenges that companies face before, during, and after a cybersecurity attack, including cybersecurity preparedness, incident response, notification requirements, and litigation and regulatory enforcement risk.
Companies should take note of two imminent developments in New York in the area of cybersecurity regulation: enforcement of the New York Department of Financial Services Cybersecurity Regulation and the effective date of the Stop Hacks and Improve Electronic Data Security Act. The Regulation and the Act both contain prescriptive cybersecurity requirements and new breach notification obligations on regulated organizations. The Act has a particularly broad reach, impacting any company that owns or licenses private information of New York residents.
Please tune in for an in-depth podcast discussion of cybersecurity and the False Claims Act, featuring Mike Vernick and Mike Scheimer.
On January 31 the U.S. Department of Defense issued CMMC v1.0, a new unified cybersecurity standard coupled with a certification program for all DoD contractors and subcontractors. While many questions remain, our overview of CMMC v1.0 provides background on the model and key considerations to assist your organization in understanding and adopting the framework.
In today’s connected world, businesses face constant pressure to improve their cybersecurity practices and to confirm that they are meeting industry standards. To continue helping businesses achieve those goals, the SEC Office of Compliance Inspections and Examination published on January 27 its latest Examination Observations related to cybersecurity and operational resiliency practices.
Recent developments reinforce the urgent need for general counsel and legal departments to deepen their focus on cybersecurity. In today’s environment, any organization can be the target of a cyberattack, regardless of industry, size, or geographic footprint. Indeed, in just the past few years, a variety of cyber adversaries have attacked financial institutions, social media sites, a movie studio, hospital systems, a peer-to-peer ridesharing company, the Democratic National Committee, hotel chains, city governments, educational institutions, telecommunications and energy utilities, prominent retailers, manufacturers, and even the mobile app of a well-known coffee and donut chain.
In a legislative environment charitably described as challenging, the fact that the Senate recently passed cybersecurity legislation by unanimous consent is noteworthy and highlights the bipartisan nature of this issue. The DHS Cyber Hunt and Incident Response Act responds to the recent spate of ransomware attacks against government agencies and private sector organizations. It would require the Department of Homeland Security to form “cyber hunt” and incident response teams that could be called upon to assist federal, state, and local entities to respond to a ransomware or other type of cybersecurity incident or to identify vulnerabilities in their systems that may increase the likelihood and success of a future attack. While continued government attention to the availability of cybersecurity capabilities should be welcomed by the private sector, the extent to which businesses will directly benefit from this legislation is unclear given its focus.
On July 25, New York Governor Andrew Cuomo signed into law a pair of bills establishing new requirements for businesses that process certain personal information related to New York residents. The changes include expanding the scope of information covered by New York’s data breach notification law; defining breaches to include incidents involving unauthorized access to covered information, even where the information is not acquired; and requiring consumer reporting agencies who suffer breaches of social security numbers to offer up to 5 years of identity theft services. Businesses maintaining the private information of New York residents also will now be required to proactively develop “reasonable safeguards” within their organization as part of a new “reasonable security requirement.”
On 8 July 2019, the UK data protection authority issued a notice of its intention to fine British Airways GBP 183.39 million (approx. USD 229.46 million) for infringements of the General Data Protection Regulation. The proposed fine relates to a data breach in which personal data of approximately 500,000 customers were compromised.
In the past two years, multiple state bills that have been introduced in the US to provide for cybersecurity requirements and standards to the insurance sector, with recent legislative activity taking place in particular within the States of Ohio, South Carolina, and Michigan. The entering into effect of multiple state laws in this area may present challenges for insurance providers operating in states where such cybersecurity requirements are provided for.
Hogan Lovells has published Demystifying the U.S. CLOUD Act, a detailed analysis of the impact of the Clarifying Lawful Overseas Use of Data Act (CLOUD Act) on non-U.S. businesses and individuals who use cloud storage solutions.
In the first fine issued by a German data protection authority under the GDPR, on 21 November 2018 the authority of the German state of Baden-Württemberg (“LfDI”) imposed a fine of Euro 20,000 on a social media provider for a violation of its data security obligations under Art. 32 of the GDPR. The company’s very good cooperation with the LfDI was key to avoiding a higher level of fines.
On October 18, 2018, FDA issued a long-awaited draft revision to its existing guidance “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices”(premarket cybersecurity guidance). This coincided with release of the FDA-supported incident preparedness and response playbook, the announcement of two new Information Sharing Analysis Organizations (ISAOs), and FDA’s recent news release discussing the agency’s enhanced cybersecurity partnership with the U.S. Department of Homeland Security (DHS) earlier this month. FDA’s recent flurry of activity focuses on providing additional clarity about when to interact with FDA, what information would be useful in submissions, and what level of documentation is expected. Cybersecurity clearly is a high priority issue for FDA and the agency is working hard to bring together stakeholders and provide the best information it can so that all entities that are involved in managing the multifaceted and evolving area of cybersecurity have the best and most current information to manage the risks of a cybersecurity intrusion.
The New York State Department of Financial Services (NYDFS) Cybersecurity Regulation came into effect March 1, 2017. Various provisions under the regulations have been implemented on a staggered implementation timeline since that date. As of September 4, 2018, covered entities are required to be in compliance with additional requirements. As you finalize your organization’s preparations for compliance, we have highlighted key aspects of these obligations that came into effect in September.
Class actions are commonplace in the United States but relatively rare in Europe. The European Union wants to change that, by facilitating class actions for mass privacy and data breaches.
On February 21, the Securities and Exchange Commission published interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents. The Commission’s release follows shorter cybersecurity “disclosure guidance” issued in 2011 by the staff of the SEC’s Division of Corporation Finance. The new guidance was prompted by the agency’s concern over the increase in the risks and frequency of data breach incidents and other cyber-attacks affecting public companies. The Commission’s release addresses many of the matters raised in the staff’s guidance, while expanding the discussion to cover additional disclosure and compliance considerations. In this post, we provide an overview of the guidance and a link to our more detailed analysis.
Whether malicious or inadvertent, workforce actions cause or contribute to over half of cyber attacks experienced by organizations. Protecting against such “insider” cyber risks can be challenging, especially given the global web of privacy, communications secrecy, and employment laws that may be implicated by monitoring workforce use of IT resources. Harriet Pearson and James Denvil, lawyers in the Hogan Lovells Privacy and Cybersecurity practice, have led the authorship of a white paper to help companies understand and navigate the workforce cyber risk landscape. An international team of privacy and cybersecurity lawyers from Hogan Lovells and select local counsel firms contributed to the analysis.
The U.S. Court of Appeals for the Eighth Circuit has become the latest appellate court to enter the contested debate over Article III standing in data breach litigation. The Eighth Circuit held that 15 of 16 named plaintiffs who never alleged they had suffered identity theft or incurred fraudulent charges on their payment cards did not have standing to pursue claims based on alleged risk of future harm in the multidistrict action In re SuperValu, Inc. Customer Data Security Breach Litigation. The Eighth Circuit’s opinion comes on the heels of other decisions that found risk of future harm following a data breach sufficient to confer Article III standing on class action plaintiffs.
The International Institute for Conflict Prevention and Resolution, a New York-based organisation offering Alternative Dispute Resolution services, has recently announced the launch of a new specialised panel of neutrals, commissioned to deal with cybersecurity disputes. The Cyber Panel is composed of experts in cyber-related areas such as data breaches and subsequent insurance claims. In a press release, Noah Hanft, President of CPR, described the new panel as guiding the “critical effort” by businesses to “prevent and/or resolve cyber-related disputes in a manner that best protects operations, customers and reputation” due to attacks now occurring with increased frequency and sophistication.
The first of several implementation deadlines in connection with the New York State Department of Financial Services’ cybersecurity regulations occurs this month, on August 28. In this post, we provide an overview of the implementation requirements to assist covered entities in preparing for the upcoming deadline.
On August 1, a bipartisan group of four senators introduced a bill that would impose specific cybersecurity requirements on providers of Internet of Things devices when doing business with the U.S. Government and provide liability protections for security researchers who disclose vulnerabilities affecting these devices. Though the bill’s security requirements would apply only in cases where entities are acting as contractors to the U.S. Government, if enacted, it likely would be influential on IoT vendors operating in the consumer context as well. The bill is largely consistent with an ongoing multistakeholder effort led by the National Telecommunications and Information Administration aimed at developing voluntary security standards for Internet-connected devices.