I usually do not re-post directly from the FTC, but given the timeliness of the subject, the wide impact of the problem and the technical nature of the issue, I thought it was warranted to re-post the FTC’s guidance on Heartbleed. Talk to your IT folks about this sooner rather than later: By Nicole Vincent Fleming […]
Category Archives: Financial Industry Spotlight
Cybersecurity remains a hot topic for regulators, including the Securities and Exchange Commission (SEC). On March 26, 2014, the SEC hosted a roundtable to discuss cybersecurity and the issues and challenges it raises for market participants. The roundtable addressed cybersecurity concerns for investment advisers, broker-dealers and public companies, and provided a forum to share information as to […]
Originally posted on July 30th, 2013 by Brian P. Bialas An interesting article by Jeffrey Spear that appeared in the New Hampshire Bar News in July shows that the federal district court in New Hampshire is struggling with the same question as the district court in Massachusetts: What is the proper interpretation of the Computer Fraud […]
In the following article from Massachusetts Lawyers Weekly (reprinted with permission), Brian Bialas comments on the latest Computer Fraud and Abuse Act case, and the resultant split in the District of Massachusett on how to interpret the CFAA: Ex-employees sued over computer use Judge narrowly construes CFAA By Eric T. Berkman A technology company could not […]
The Federal Trade Commission has issued revised guidance designed to help businesses comply with the requirements of the Red Flags Rule, which protects consumers by requiring businesses to watch for and respond to warning signs or “red flags” of identity theft. The guidance outlines which businesses – financial institutions and some creditors – are covered […]
Feb 18, 2013 U.S. Supreme Court takes pass on CFAA lawsuit; uncertainty remains In 1st Circuit, ‘ball in employer’s court’ By Correy E. Stephenson The U.S. Supreme Court’s denial of certiorari in a Computer Fraud and Abuse Act case leaves employment lawyers in the 1st Circuit and beyond with continuing uncertainty.Employers frequently add a […]
PCI-DSS Update: The Payment Card Industry Security Standards Council Issues Guidelines for Security Risk Assessments, Cloud Computing, and Accepting Payments on Mobile Devices
Merchants who accept credit cards have a duty to protect customer information, not only by law (see, e.g., 201 CMR 17.00), but also because the credit card companies tell them so. The Payment Card Industry Security Standards Council was created by Visa, MasterCard and American Express to tell merchants precisely what they are supposed to […]
The FTC announced today that it has, at long last, modified its Red Flags Rule to match the language of theRed Flag Clarification Act of 2010. As this blog explained in 2010: As originally drafted, “creditors” would have included anyone “who regularly extends, renews, or continues credit” or “who regularly arranges for the extension, renewal, or continuation of credit,” […]
A recent story in the Wall Street Journal discusses how small businesses can push back against banks which do not provide sufficient security for their bank accounts. The article focused on the recent First Circuit decision, Patco Construction Co. v. People’s United Bank, involving a bank account that had been drained by multiple fraudulent transactions. […]
A recent Harris Interactive survey of 2,625 adult Americans reveals some interesting attitudes towards employer confidential information, including significant variations depending on an employee’s age: – 68% of 18-34 year olds responded that it is acceptable to remove confidential information from their place of employment. This contrasts with just half (50%) of those 55 years […]
The Federal Trade Commission has joined the Department of Justice and the Consumer Financial Protection Bureau in filing a memorandum in support of the constitutionality of the Fair Credit Reporting Act. This issue arose in Shamara King v. General Information Services, Inc., a "consumer class action based upon Defendant’s willful violation of the Fair Credit Reporting […]
In an article that repeats a common theme in this space, this week’s Economist talks about how researchers are trying to help ordinary people toughen up their passwords. But despite the efforts of these researchers, the article’s conclusion is a gloomy one: The upshot is that there is probably no right answer. All security is […]
If you haven’t Googled yourself in a while, this might be a good time. My own self-search reveals, among other things, a page at mylife.com. I didn’t put it there, and I’d rather it not be there. However, right now, there isn’t a right to have your personal or professional information be deleted from social media, review sites, […]
I was interviewed for this PC World piece on the potential impact of Facebook’s recently announced IPO on data privacy. My take: being a public company brings with it more transparency and more regulation, which will force Facebook to be more cautious and ultimately more open about its privacy policies. This seems obvious to me, but […]
Our colleagues have reminded us that on March 1, 2012, the contract grandfathering provisions of the Massachusetts Data Security Law and Regulations will expire: by Catherine M. Anderson, Jeffrey D. Collins As we previously noted in our Foley Adviser dated February 3, 2010, “New Massachusetts Data Security Law and Regulations-Comprehensive Information Security Plan required before March […]
A decision in Tyler v. Michaels Stores earlier this month from the United States District Court for the District of Massachusetts, the use of a consumer’s Zip Code to find her address and send her mailings was held to be a statutory violation, but did not give rise to a claim for damages. Melissa Tyler brought […]
Interesting Wall Street Journal article about rival banks joining forces to beat cyber crime. Sounds a lot like the Advanced Cyber Security Center.
I was interviewed and quoted as part of a Compliance Week article on the new SEC guidance on disclosures of cyber security incidents: Colin Zick, a partner at law firm Foley Hoag, says the guidance is too general and that companies will have to think hard when assessing what information to disclose. “There are a lot […]
On October 13, the SEC issued CF Disclosure Guidance: Topic No. 2: Cybersecurity. This guidance provides the Division of Corporation Finance’s views regarding disclosure obligations relating to cybersecurity risks and cyber incidents. It follows Chairman Schapiro’s June 2011 letter to Senator Rockefeller on the subject.
The latest legislator to enter into the federal data security and privacy sweepstakes is Senator Richard Blumenthal (D-CT) who introduced legislation, S. 1535, on September 8. This bill, if passed, would require companies dealing with consumers to strengthen their data security and privacy policies. In particular, Senator Blumenthal’s bill, “The Personal Data Protection and Breach Accountability Act,” would required businesses […]
I just completed a webinar for the Association of Corporate Counsel, with Ed Palmieri of Facebook, discussing "What Every In-House Counsel Needs to Know About Data Security and Privacy." The program slides can be found at this link.
hackers Anonymous “Lulz Security”
On April 15, the White House formally released its National Strategy for Trusted Identities in Cyberspace. As we noted earlier, the “trusted identity” concept is intended to allow the public and private sectors to collaborate in order to raise the level of trust associated with the exposure of the identities of individuals, organizations, networks, services and devices in […]
While the effect of the federal legislation modifying the FTC Red Flags Rule has been known for a while, the court proceedings that challenged the rule have now caught up. The American Bar Association’s suit has been dismissed, and the American Medical Association announced it is voluntarily dismissing its case: "The lawsuit filed by the Litigation […]
On December 18, 2010, President Obama signed into law the Red Flag Clarification Act of 2010. The Act will change a single definition in prior law and reduce the scope of the FTC Red Flags Rule, ending a two-year long saga over the scope of its enforcement. As we have noted in past entries about Red Flags Rule compliance, […]
Posted below is another contribution from my colleague David Broadwin on our Emerging Enterprise Center blog about the potential for legislative change in 2011. I agree with the conclusions he draws: This is an area where bipartisan concensus is possible. The industry powers will fight against “Do Not Track” and will win that fight. Industry will […]
FTC Proposes Privacy Framework That Will Impact the Business Model of All Online and Mobile Advertising Companies
Our colleagues in Foley Hoag’s Emerging Enterprise Center have summarized the FTC preliminary staff report, “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” which we posted on December 1. We are cross-posting the analysis from their blog below. It seems likely that the next two years will bring significant changes to this […]
A recent article in the Wall Street Journal suggests that "top-tier venture-capital firms" have invested in start-up businesses in the privacy space in recent months. This could be a sign that the so-called "smart money" sees data privacy and security as a viable long-term industry, and not this decade’s version of Y2K. It seems likely […]
Today, the Federal Trade Commission issued a press release and an Enforcement Policy extending the deadline for enforcement of the FTC’s Red Flags Rule through December 31, 2010. The agency cited requests from members of Congress for a postponement of the deadline while legislators tinker with federal law to exclude certain businesses from application of the Rule.
Regulators Provide Online Privacy Notice Builder to Help Financial Institutions Comply with Gramm Leach Bliley Act
Last week a number of federal regulatory agencies rolled out an online privacy notice builder for financial institutions subject to one or more of the Gramm Leach Bliley Act (GLBA) regulations. The agencies involved include the Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), Office of Comptroller of Currency (OCC), Federal Deposit Insurance […]
Incident of the Week: Security Officer Indicted On Obstruction of Justice Charges For Shredding Evidence
Thomas Raffanello, global director of security for Stanford Financial Group (SFG), now faces charges of obstruction of justice based on claims that he directed employees at SFG’s Fort Lauderdale office to shred evidence of fraud. In February, the Securities and Exchange Commission (SEC) filed a complaint against SFG (.pdf) in Texas alleging that the double-digit returns […]
Incident of the Week: Goldman Sachs Programmer Arrested for Transfer of Top Secret Source Code for Goldman’s Automated Trading System
On July 3, 2009, FBI arrested Sergey Aleynikov, a Goldman Sachs programmer, as he disembarked at Newark airport on charges that he violated the Electronic Espionage Act (18 U.S.C. sec. 1832) when he sent company data to an overseas document server.
On June 11, 2009, six federal agencies issued answers to a set of frequently asked questions (FAQ) (.pdf) to “assist financial institutions, creditors, users of consumer reports and card issuers in complying with the final rulemaking” on identity theft. The agencies behind the FAQ are those that originally promulgated the Red Flags Rules (and issued Guidelines to […]
Cracking Down: FTC Settles Claims Against Mortgage Company For Violations of FTC Safeguards Rule – Requires Information Security Program and 10 Years of Security Audits
On Tuesday, May 5, 2009, in a press release devoted largely to the FTC’s congressional testimony on peer-to-peer file sharing, the FTC announced that it had reached a settlement of its claims against James B. Nutter & Company, a mortgage company that did not implement information security measures to meet federal minimums. According to the FTC, the […]
Cracking Down: FTC Fines Credit Research Firm $500,000 For Lax Security, Obtains Court Order Requiring Company to Develop “Comprehensive Information Security Program”
On Thursday, March 5, 2009, the FTC announced that it had reached a settlement with financial research firm Rental Research Services, Inc. (RRS) and its managing officer, Lee Mikkelson, to resolve the FTC’s claims that the firm had failed to provide adequate security for sensitive consumer information provided to identity thieves posing as legitimate users. This case provides a number of key lessons for businesses who have not considered whether their security practices amount to “unfair or deceptive acts or practices” under federal and state laws.
FTC Asks Congress For Enhanced Rulemaking and Enforcement Powers To Curb Abuses in Financial Industry
On Tuesday, March 24, 2009, FTC Chairman Jon Liebowitz testified before the U.S. House Subcommittee on Commerce, Trade and Consumer Protection seeking enhanced legal powers “[t]o allow the FTC to perform a greater and more effective role in protecting consumers.”
According to the Identity Theft Resource Center’s (ITRC) recently released report (.pdf) on data breaches in 2008, one of the top five causes of data breaches are what the ITRC labels “accidental exposure.” [For our earlier coverage on the ITRC’s report see this link.] The ITRC reports that accidental exposure amount to 95 of the 656 […]
Isn’t There Already A Federal Standard Governing Information Security? — Re-Examining the Gramm-Leach Bliley Act
By Stacy Anderson and Gabriel M. Helmer. As an ever-increasing number of states enact legislation governing identity theft, customer data and personal information, pressure for clear federal legislation governing information security has mounted. For example, in December 2008, the FTC joined the growing number of voices calling on Congress to enact a legislation to create a […]