Category

Cybersecurity

09 October 2020

Changes in Chinese Securities Law and Draft Data Security Law Affect Cross-Border Investigations

Recent changes to Chinese law have broad implications on cross-border data transfer in the course of investigations conducted by non-Chinese regulators. Clients work closely with counsel to navigate potential legal landmines in any defense of an investigation involving data from China.

Just over six months ago, on March 24, 2020, the People’s Republic of China’s (PRC) revised Securities Law (revised on December 28, 2019) (中华⼈民共和国证券法(2019年修订) went into effect. While the revised Securities Law affects many aspects of China’s securities law framework (including the registration of new securities for initial public offerings, disclosure requirements, and investor protection rules), a new “blocking” provision is particularly notable. Specifically, Article 177 of the revised Securities Law prohibits non-Chinese securities regulators from conducting investigations within China and prevents Chinese individuals and entities from providing information to such regulators without first receiving approval from the China Securities Regulatory Commission and/or other competent departments under the State Council.

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08 October 2020

Office of Foreign Assets Control: Making or Facilitating Ransomware Payments May Violate U.S. Sanctions

On October 1, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published an advisory that highlights the risk of potential U.S. sanctions law violations if U.S. individuals and businesses comply with ransomware payment demands.1

Ransomware attacks use malware, often injected through phishing schemes, to encrypt a victim’s data files or programs, followed by a ransom demand by the threat actor that offers the decryption key in exchange for payment. Payment is often demanded in bitcoin, and thus third-party services are often used to make such payments. Increasingly, ransomware attacks not only lock data up but steal data from the victim and threaten to publish sensitive files belonging to victims. According to OFAC, ransomware attacks have been increasing over the last two years and are a special risk during the COVID-19 pandemic, with cybercriminals targeting not only large corporations but also small to medium enterprises, hospitals, schools, and local government agencies.2

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29 September 2020

An Early Recap of Privacy in 2020: A US Perspective

*This article was adapted from “Global Overview,” appearing in The Privacy, Data Protection and Cybersecurity Law Review (7th Ed. 2020)(Editor Alan Charles Raul), published by Law Business Research Ltd., and first published by the International Association of Privacy Professionals Privacy Perspectives series on September 28, 2020.

Privacy, like everything else in 2020, was dominated by the COVID-19 pandemic. Employers and governments have been required to consider privacy in adjusting workplace practices to account for who has a fever and other symptoms, who has traveled where, who has come into contact with whom, and what community members have tested positive or been exposed.

As a result of all this need for tracking and tracing, governments and citizens alike have recognized the inevitable trade-offs between exclusive focus on privacy versus exclusive focus on public health and safety.

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19 August 2020

Historic Charges: First Enforcement Action Filed by New York Department of Financial Services Under Cybersecurity Regulation

On July 21, 2020, the New York State Department of Financial Services (NYDFS or the Department) issued a statement of charges and notice of hearing (the Statement) against First American Title Insurance Company (First American) for violations of the Department’s Cybersecurity Requirements for Financial Services Companies, 23 N.Y.C.R.R. Part 500 (Cybersecurity Regulation or Regulation). The First American Statement of charges alleges six violations of the Cybersecurity Regulation and marks the Department’s first action pursuant to the Regulation, which is enforced by the recently created NYDFS Cybersecurity Division.1

NYDFS’s Statement seeks relief against First American, including civil monetary penalties and an order requiring First American to remediate any defined violations. Although the Statement does not include a calculation of the total penalty, the NYDFS explains that the civil monetary fines against First American are to be assessed pursuant to the Financial Services Law, which provides for a maximum civil monetary penalty of $1,000 per violation of the Regulation.2 Because First American’s violations included the exposure of millions of documents containing nonpublic information (NPI), the total penalty potentially could be substantial. The First American hearing is scheduled to occur on October 26, 2020, at the NYDFS.

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13 August 2020

Digital Health and Cyber Risk in the “New Normal”

Sidley partnered with Aon’s Cyber Solutions for an exclusive webinar for life sciences organizations to address developments in digital health and cybersecurity in light of some key trends affecting the industry today.

The speakers discussed the latest in digital health and how to better understand and mitigate cyber risk, as well as protect life sciences organizations’ highly valuable and sensitive data.

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17 July 2020

Payments and Fintech: Addressing Key EU, UK and U.S. Cybersecurity Issues

Data is key to innovation, growth, and staying competitive in the payments sector. In recent years, there has been a massive increase in the volume of data maintained and processed by payment service providers. Regulators and policymakers on both sides of the Atlantic are imposing increasingly prescriptive cybersecurity regulatory frameworks and closer scrutiny upon companies, while new and escalating cybersecurity threats challenge standard safeguards.

For the latest insights on the risks posed and effective ways to mitigate them, please join OneTrust DataGuidance and Sidley for a webinar focusing on the cybersecurity issues confronting the payments and fintech sectors in the EU, UK, and U.S.

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15 July 2020

Partnering With Tech and Fintech Firms: Key EU/UK Regulatory Considerations for the Payments Sector

There has been a rapid increase in collaboration between fintechs and other technology firms and more traditional payment service providers (PSPs) such as banks, merchant acquirers, and money transmitters. While fintechs and technology firms are often seen as direct competitors of traditional PSPs, in a market driven by innovation, both sides of the market increasingly consider collaboration a mutually beneficial way to play to each participating firm’s strengths. For more traditional PSPs, the technologies that a fintech or technology firm develops can help enhance and streamline, and in some cases modernize, the services provided to customers. For a fintech or technology firm, partnering with a PSP can provide an efficient and effective way to expand into the payment services market, particularly for customers who are more inclined to use traditional PSPs.

Regulators are monitoring these developments with growing interest and with an eye to potential risks to customers and markets as well as their ability to supervise regulated firms and their operations. This post highlights a number of EU/UK regulatory issues that fintechs, technology companies, and PSPs should consider when collaborating with one another.

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21 May 2020

FinCEN Issues Notice on Reporting COVID-19 Criminal and Suspicious Activities, Companion Advisory on COVID-19-Related Medical Scams

On May 18, 2020, the Financial Crimes Enforcement Network (FinCEN), as part of its COVID-19-related response, issued a Notice Related to the Coronavirus Disease 2019 (COVID-19) reminding financial institutions of certain Bank Secrecy Act (BSA) obligations and pertinent information regarding reporting COVID-19-related criminal and suspicious activity (the Notice). Contemporaneously, FinCEN issued an Advisory on Medical Scams Related to the Coronavirus Disease 2019 (COVID-19) (the Advisory).

In light of the Notice and Advisory, firms should (a) continue to comply with their BSA obligations; (b) include COVID-19 detail only when that detail relates to the reported suspicious activity; (c) review policies and procedures to notify and to provide COVID-19 information to government agencies, including verification of the requesting agency; (d) review the Advisory red flags related to medical scams; and (e) consider revising policies and procedures as appropriate.

COVID-19-related frauds are a special emphasis for law enforcement and regulatory agencies, so failing to detect and report those issues could be viewed as a significant flaw in a firm’s anti-money laundering (AML) program.

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11 May 2020

COVID-19 – Privacy and Cybersecurity: An Action Plan For Business

As the COVID-19 pandemic evolves, companies should not lose sight of the privacy, data protection and cybersecurity implications of the new and sudden digital reality. This Action Plan sets out some key issues and recommendations to consider as your business manages this rapidly developing dynamic and considers protocols to support the workforce and mitigate risk in a transition back to work. (more…)

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20 April 2020

UK Supreme Court Rules Morrisons Not Vicariously Liable for Malicious Data Breach by Employee

Case: WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12

In a decision that employers will welcome, the UK Supreme Court recently ruled that Morrison Supermarkets (Morrisons) was not vicariously liable for a data breach committed maliciously by a former employee who, acting to satisfy a personal vendetta against Morrisons, disclosed employee payroll data online.

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