Digital Media and Data Privacy Law Blog

The FCC has been flexing its muscles in 2015 when it comes to enforcing data security requirements.  In April, it reached a $25 million settlement with AT&T Services, Inc. for failing to safeguard customers’ personal information.  In July, it reached a $3.5 million settlement with TerraCom, Inc. and YourTel America, Inc. to resolve similar claims.  Earlier this month, the FCC announced it had reached a $595,000 settlement with Cox Communications, Inc. (“Cox”) to resolve the Enforcement Bureau’s investigation into whether Cox failed to properly protect its customers’ ... Read More 

Lawyers and compliance professionals constantly tout the importance of internal information security policies, particularly in light of data privacy problems that are reported almost daily in the media.  Admittedly, drafting such policies as a proactive measure can be a pain because there is always a tendency to worry that, unless you’ve suffered a data breach, you are the proverbial “solution in search of a problem.”

But it’s not.  In fact, in some cases, it’s actually required.  HIPAA (for protected health information), Gramm-Leach-Bliley (for financial ... Read More 

Over the last couple years, the SEC’s cybersecurity bark has been worse than its bite.  Its Office of Compliance, Inspections, and Examinations issued examination priorities in 2014.  Commissioner Aguilar warned public company boards that they had better get smart about the topic a few months later.  The results of OCIE’s cybersecurity exam sweep were released in March of this year.  And the Investment Management Division said words, not many words, about investment advisers’ responsibilities in this area in July.

Alleged Facts

What it hasn’t done recently is sue somebody ... Read More 

Ed. Note: This entry is cross posted from Cady Bar the Door, David Smyth's blog offering Insight & Commentary on SEC Enforcement Actions and White Collar Crime.

Lots of agencies and organizations want to boss you around about cybersecurity.  In April, the SEC and the Justice Department published more directions on the issue.  We’ll cover the very brief guidance issued by the SEC’s Division of Investment Management first, and then turn to DOJ in a later post.

First, as with everyone else, the IM Division thinks cybersecurity is very, very important for investment companies and ... Read More 

I haven’t yet turned to a life of crime, so far be it from me to criticize actual criminals’ profit-maximizing strategies. It’s easy for me to nitpick, but I’m not the one strapping on my mask and trying to earn a (dis)honest dollar every day. But have a look at this Reuters story from Tuesday. 

In it, we learn that the SEC and the Secret Service are investigating a sophisticated computer hacking group known as “FIN4” that allegedly “has tried to hack into email accounts at more than 100 companies, looking for confidential information on mergers and other market-moving ... Read More 

Over the past months, my experiences with physician practices have made me realize that many practices do not understand how HIPAA applies to subpoenas for medical records.  More worrisome, I suspect that many practices nationwide routinely violate HIPAA when they receive a subpoena.

Here’s what I’ve observed:  Practices receive state court subpoenas that are signed by lawyers and that demand the production of medical records, and the practices automatically assume they must produce the records.  This is a dangerous assumption—the production of the records may very well ... Read More 

Suffering a data breach is bad enough. As often as it appears to happen, companies that are affected by a breach still shoulder a considerable burden. Management must stop the trains to identify the cause and scope of the breach—and then prepare for the aftermath. Lawyers are involved. The company’s brand is at risk. And the costs—employee time, legal fees, security consultants—quickly escalate.

But what if you determine that your company didn’t really need the information that was exposed? Suppose you find out that the breach involved a file that contained ... Read More 

Ed. Note: This entry is cross posted from Cady Bar the Door, David Smyth's blog offering Insight & Commentary on SEC Enforcement Actions and White Collar Crime.

We’re behind on this, but better (a little bit) late than never. Last month the SEC’s Office of Compliance, Inspections and Examinations released the first results of its Cybersecurity Examination Initiative, announced in April 2014. As part of the initiative, OCIE staff examined 57 broker-dealers and 49 investment advisers to better understand how these entities “address the legal, regulatory, and compliance ... Read More 

Ed. Note: This entry is cross posted from Cady Bar the Door, David Smyth's blog offering Insight & Commentary on SEC Enforcement Actions and White Collar Crime.

When I was at the SEC and online broker-dealers’ customers were the victims of hacking incidents, I used to wonder, why don’t the broker-dealers require multi-factor authentication to gain access to accounts? It was a silly question. I knew the answer. Multi-factor authentication is a pain and nobody likes it.

Do you know what it is? Here’s what Wikipedia says, so it must be true:

Multi-factor authentication ... Read More 

Unless you have been completely disconnected from all media, you are probably already aware that on Sunday, February 15, 2015, the FAA announced the release of its long-awaited rules to govern commercial sUAS (small unmanned aircraft systems) operations in the United States. The FAA’s proposed sUAS rules arrived like a barely-late valentine or box of candy, with the recipients hoping to read loving prose and enjoy fresh, rich chocolates. At this point, of course, the rules are merely a proposed regulatory regime (as embodied in a document that is called a “Notice of Proposed ... Read More