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On March 15, 2023 the Securities and Exchange Commission (“SEC”) proposed three new sets of rules (the “Proposed Rules”) which, if adopted, would require a variety of companies to beef up their cybersecurity policies and data breach notification procedures. As characterized by SEC Chair Gary Gensler, the Proposed Rules aim to promote “cyber resiliency” in furtherance of the SEC’s “responsibility to help protect for financial stability.”[1]

In particular, the SEC has proposed:

  • Amendments to Regulation S-P which would, among other things, require broker-dealers, investment companies, and registered investment advisers to adopt written policies and procedures for response to data breaches, and to provide notice to individuals “reasonably likely” to be impacted within thirty days after becoming aware that an incident was “reasonably likely” to have occurred (“Proposed Reg S-P Amendments”).[2]
  • New requirements for a number of “Market Entities” (including broker-dealers, clearing agencies, and national securities exchanges) to, among other things: (i) implement cybersecurity risk policies and procedures; (ii) annually assess the design and effectiveness of these policies and procedures; and (iii) notify the SEC and the public of any “significant cybersecurity incident” (“Proposed Cybersecurity Risk Management Rule”).[3]
  • Amendments to Regulation Systems Compliance and Integrity (“Reg SCI”) in order to expand the entities covered by Reg SCI (“SCI Entities”) and add additional data security and notification requirements to SCI Entities (“Proposed Reg SCI Amendments”).[4]
Continue Reading SEC Proposes Sweeping New Cybersecurity Rules: Is Your Company Prepared?

Under China’s data protection regulatory framework, data processors are required to pass a security assessment conducted by the cybersecurity regulator before transferring certain categories or volumes of data out of China. This January, six months after the Cyberspace Administration of China (“CAC”) released the Measures on Security Assessment of Outbound Data Transfers (“Measures”), the Beijing counterpart of CAC reported the first two cases where the data processors passed the security assessments led by CAC, which sheds some light on the uncertainty and complexity of the security assessment.

Uncertainty of Reviewing Process and End of Grace Period

As disclosed by Beijing CAC, as of February 22, 2023, Beijing CAC has assisted more than 310 entities with their potential applications for the security assessment of outbound data transfers, and has received 48 formal applications from organizations in industries such as technology, e-commerce, healthcare, finance, automotive, and civil aviation, including multinational companies. Among many applications, CAC granted two organizations with the approval for transferring data out of China, namely the Beijing Friendship Hospital of the Capital Medical University and Air China.

Continue Reading China Unveils Two Approved Outbound Data Transfer Cases
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On 16 November 2022, EU Regulation 2022/2065, better known as the Digital Services Act (“DSA”), came into force. The DSA is a key development in the use of online services in the European Union (“EU”), with an impact on online services as significant as the one which the General Data Protection Regulation (“GDPR”) had upon the collection, use, transfer, and storage of data originating in the EU on 25 May 2018.

Ambit

The DSA sets out rules and obligations for digital services providers that act as intermediaries in their role of connecting consumers with goods, services, and content.  

Its goal is to regulate and control the dissemination of illegal or harmful content online, provide more consumer protection in online marketplaces, and to introduce safeguards for internet users and users of digital services. It also introduces new obligations for major online platforms and search engines to prevent such platforms being abused.

Continue Reading The EU Digital Services Act: Overview and Impact
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Ransomware attacks have become one of the most common and pervasive cybercrimes perpetrated against U.S. companies. A bad actor, often from overseas, will gain access to upload malware onto a company’s network storage or application platforms that encrypts all files it can access. A message or text file is usually left with instructions on how to contact the attacker to pay a ransom for the decryption key. In the worst case, a ransomware attack can freeze the business operations by effectively removing access to the company’s critical systems and rendering them useless. Aside from the business impact, what legal implications are created by a ransomware attack?

Privacy

The greatest legal concern is one of privacy. By definition, ransomware attacks gain access to the internal systems maintained or owned by a business. However, not all ransomware attacks are created equal and privacy obligations differ from one attack to another.

Continue Reading Ransomware Attacks – Harmless Annoyances or Catastrophic Events?

Seyfarth Synopsis:  On May 12, 2021, President Joe Biden issued a very broad, 34 page “Executive Order on Improving the Nation’s Cybersecurity.” The Executive Order, or “EO”, can be found here. This order comes six months after the notorious SolarWinds attack, and mere weeks after other high-profile attacks have invaded our networks, and shut

…

There have been seminal events in the cybersecurity space since 2012, but there has likely been no event in recent times bigger than the SolarWinds attack which was first announced in December 2020. Though it likely had “nation-state” origins, the SolarWinds attack raised a number of serious issues for US companies and indeed the US…

From court closures and the way judges conduct appearances and trials to the expected wave of lawsuits across a multitude of areas and industries, the COVID-19 outbreak is having a notable impact in the litigation space—and is expected to for quite some time.

To help navigate the litigation landscape, we are kicking off a webinar…

In this unprecedented time, businesses are, more than ever, implementing and rapidly rolling out programs for remote or at-home work by employees. The quick changes in local and state governmental “shelter in place” instructions and Public Heath directives have placed significant strains on remote networks and caused local shortages of laptop computers at office supply and electronic stores across the country.

With this unexpected increase in remote workers, many companies are pushing the limits of their existing remote access technology, or deploying ad hoc technology and access solutions as quickly as possible. Some of those companies are not taking the time to consider potential information security, privacy, and other compliance ramifications for those same remote workers.

It is entirely appropriate and necessary for companies to adapt their technology and work networks are utilized to the greatest degree possible to remain in operation and serve business and customer needs. But as always, data security and privacy should always be part of the equation.

Below are some essential things to know about the security risks posed by remote or at-home worker, and a Technical Checklist for Remote employees to make sure your corporate data is safe, and you do not risk compliance challenges with data privacy law and requirements.
Continue Reading Cybersecurity, Data Privacy, and Compliance Issues Related to Remote Workers

Attorney General Becerra’s office posted the long-awaited draft CCPA regulations a little before 2:00 pm (PST) October 10th. It was a bit of a curve ball, to be perfectly honest (considering the final swath of amendments to the CCPA are not even final until Governor Newsom signs them, or on October 13th). Tellingly, the California Administrative Procedure Act requires the California Department of Finance to approve “major regulations” (and they have 30 days to do that) prior to publication. Based on this, it would seem that these regulations were drafted prior to the amendments to the CCPA going through the legislature. This does not seem like an effective way to draft regulations, but hey, no one should tell the AG he shouldn’t jump the gun! They are now out there so, one reviews anyway.

Topping out at a modest 24 pages (the CCPA itself is 19 pages), the regulations are organized into seven articles. We’re directing our comments to the issues that pop out to us initially, and as always, we’ll post further observations as things progress.
Continue Reading And the Wait for CCPA Rules is Over …. Kind Of

On Thursday, July 11, 2019, a diverse group of trade associations spanning numerous industries, including retail, telecom, manufacturing, and food and beverage, urged Congress to enact a consumer privacy law.  In a letter to the Senate and House commerce committees, the coalition of 27 industry groups asked Congress “to act quickly to adopt a robust…