New York State Department of Financial Services Proposes Cybersecurity Regulations for Financial Services Companies

If the New York State Department of Financial Services (“DFS”) has its way, come January 1, 2017, financial services companies that require a form of authorization to operate under the banking, insurance, or financial services laws (“Covered Entities”) will be required to comply with a new set of comprehensive cybersecurity regulations aimed at safeguarding information systems and nonpublic information.

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Espionage and Export Controls: The iPhone Hack Highlights The New World of Warfare

Last week, researchers at Citizen Lab uncovered sophisticated new spyware that allowed hackers to take complete control of anyone’s iPhone, turning the phone into a pocket-spy to intercept communications, track movements and harvest personal data. The malicious software, codenamed “Pegasus,” is believed to have been developed by the NSO Group, an Israeli company (whose majority shareholder is a San Francisco based private equity firm) that describes itself as a “leader in cyber warfare” and sells its software — with a price tag of $1 million – primarily to foreign governments. The software apparently took advantage of three previously unknown security flaws in Apple’s iOS software, and was described by experts as “the most sophisticated” ever seen on the market. Apple quickly released a patch of its software, iOS 9.3.5, and urged users to download it immediately.

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SEC Steps Up Cybersecurity Enforcement with $1 Million Fine Against Morgan Stanley

The Securities and Exchange Commission’s (“SEC”) recent $1 million settlement with Morgan Stanley Smith Barney LLC (“MSSB”) marked a turning point in the agency’s focus on cybersecurity issues, an area that the agency has proclaimed a top enforcement priority in recent years.  The MSSB settlement addressed various cybersecurity deficiencies that led to the misappropriation of sensitive data for approximately 730,000 customer accounts.

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Six Things You Need to Know Before Collecting Biometric Information

1. Illinois and Texas recently enacted laws regulating the collection and use of biometric information (e., information based on an individual’s biometric identifiers, such as iris scans, fingerprints, voiceprints, or facial geometry) and a number of other states, including New York and California, are considering adopting such statutes. The Illinois Biometric Information Privacy Act (“BIPA”) permits private rights of action and provides for statutory damages ranging from $1,000 to $5,000 per violation. The Texas analog, entitled Capture or Use of Biometric Identifier (“CUBI”), is enforceable only by the state attorney general and permits civil penalties up to $25,000 per violation.

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Let’s Go Crazy: The FTC and FCC Launch “Parallel” Investigations Into Security Updates of Mobile Communications Industry

Earlier this week, the FTC and FCC announced “parallel” investigations into how carriers and mobile device makers release information on vulnerabilities, and how and when mobile security patches are distributed. The regulators, who have publicly jockeyed for position on privacy and cybersecurity matters in the past year, appear to have reached a truce of sorts, allowing each agency to examine industry players within its core jurisdiction.

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In Wake of Panama Papers Scandal Obama Calls for Stricter Bank Regulations, Tax Rules

In a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations.

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NTIA Issues Request for Comments on Policies Related to Cyber Threats Surrounding Internet of Things

On April 6, 2016, National Telecommunications and Information Administration (NTIA) issued a federal notice to request public comment on the benefits, challenges, and potential roles for the government in fostering the advancement of the Internet of Things (IoT).  (RFC at http://www.ntia.doc.gov/files/ntia/publications/fr_rfc_iot_04062016.pdf).

Comments are due on May 23, 2016.

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Mooting Class Actions by Offer of Judgment – Episode 2: The Ninth Circuit Strikes Back

In Campbell-Ewald v. Gomez, 136 S. Ct. 663 (Jan. 20, 2016), the Supreme Court resolved a split among courts and held that an unaccepted settlement offer of complete individual relief does not moot the plaintiff’s lawsuit.  However, the Court expressly left open the question of “whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and then the court enters judgment for the plaintiff in that amount.”  136 S. Ct. at 672.  Continue Reading

Back at it Again (with the Standing Opinions): Seventh Circuit Reiterates Article III Standing in Data Breach Class Actions

On July 20, 2015, the Seventh Circuit issued its opinion in Remijas v. Neiman Marcus Group, 794 F. 3d 688 (7th Circ. 2015), which immediately became the low-water mark for Article III standing in data breach cases.  In short, Remijas became the first Circuit decision to expressly and expansively recognize that risk of future injury and time and money spent protecting against identity theft as a result of a data breach were sufficient to confer Article III standing.

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Mooting Plaintiff’s Class Action Even After Plaintiff Refuses An Offer Of Judgment

For years, litigants have battled over whether a defendant’s offer of judgment, which completely satisfies the plaintiff’s individual claim, can moot a class action. In Campbell-Ewald v. Gomez, 136 S. Ct. 663 (2016), the U.S. Supreme Court recently held that no case is mooted when a plaintiff refuses to accept an offer of judgment.  The Supreme Court, however, left open the question of what happens when a defendant follows through with its offer by tendering complete individual relief, depositing the monetary relief with the court, and moving for entry of judgment. Continue Reading

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