DOJ Deploys the FCA on Cybersecurity Fraud

This article originally appeared in Law360 on November 3, 2021.

Sidley lawyers Brenna Jenny and Sujit Raman recently published an article in Law360 entitled How To Minimize FCA Cyber Fraud Enforcement Risk, which analyzes the implications of DOJ’s recent formation of a Civil Cyber-Fraud Initiative to use the FCA to pursue cybersecurity-related fraud.  Although the Initiative focuses generally on government contractors and grant recipients—and does not, by its terms, impose any new cybersecurity requirements—the project promises in particular to attract whistleblowers in the defense industry, as recent years have witnessed high-profile FCA cases implicating alleged cybersecurity non-compliance in that sector.  The healthcare industry may also see a marked increase in cybersecurity-related qui tams, especially in light of a recent Department of Health and Human Services Office of Inspector General report taking the Centers for Medicare & Medicaid Services to task for failing to hold hospitals accountable for the cybersecurity of their networked devices.  Healthcare providers and medical device manufacturers, in addition to other government contractors and grantees, would do well to heed DOJ’s warning that “cybersecurity failures…are prime candidates for potential False Claims Act enforcement.”

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Institutional Investor’s Introduction to Blockchain and Digital Asset Investing

Article I: Digital Asset Overview and Methods to Gain Exposure to Digital Assets  

Given the growth of markets for cryptocurrencies and other blockchain-based assets, often referred to as “digital assets,” we see growing interest from traditional investment managers in gaining exposure to this emerging asset class. We have seen development of many new products and service offerings to facilitate institutional investment in digital assets over the past year. With the recent announcement of the first bitcoin-exchange traded fund, this week, we expect continued and expansive growth in this area. This article aims to serve as an introductory guide to digital asset investing for institutional investors by describing at a high level the available service offerings and potential avenues for investment managers to gain exposure to the digital assets space.

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How Artificial Intelligence Manufacturers Can Protect Themselves Against Future Negligence Claims

Innovative medical devices have changed the healthcare landscape and will continue making dramatic improvements in patient care. Nevertheless, the growth of such devices will inevitably lead to increased litigation over their alleged failures. All companies developing healthcare tech therefore need to consider measures to protect themselves against potential claims.

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Data: A New Direction or Misdirection? ICO Responds to UK Government Consultation on Its Proposed New Data Protection Regime

On 7 October 2021, the Information Commissioner’s Office (“ICO”), published its response to the UK government’s consultation entitled “Data: A new direction”. The consultation which sets out the proposals of the Department for Digital, Culture Media & Sport (“DCMS”) promised far-reaching reforms to the UK data protection regime with an emphasis on capturing the power of data to drive economic growth and innovation. The DCMS’s proposals posed a significant moment for UK data protection law and as such Sidley was pleased to host a Chatham House Rule discussion about this important consultation on 15 September 2021 with Joe Jones, Deputy Director, International Data Transfers at the DCMS. We hope that interested readers may have attended our discussion with Deputy Director Jones.

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Governance of Data Innovation: Risks and Rewards for Business – Key Takeaways from our Discussion with the UK Information Commissioner’s Office

On September 21, 2021, Sidley partners Alan Raul and William Long engaged in a fireside chat with Elizabeth Denham and Claudia Berg of the United Kingdom (UK) Information Commissioner’s Office (ICO). Elizabeth Denham is due to end her five-year tenure as UK Information Commissioner on October 31, 2021. Claudia Berg is the ICO’s General Counsel. The webinar entitled “Governance of Data Innovation: Risks and Rewards for Business” touched on the crucial issues in data protection and cyberlaw including the future of international data transfers, emerging technologies, and Brexit. Please see below our “10 Key Takeaways” from this fascinating and timely discussion.

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National AI Strategy: The UK Government Publishes Its Artificial Intelligence Strategy for the Next Decade

On 22 September 2021, the UK Government (the “Government”) published its Artificial Intelligence (“AI”) strategy. The paper outlines the Government’s plan to make Britain a “global superpower” in the AI arena, and sets out an agenda to build the most “pro-innovation regulatory environment in the world”. This post highlights some of the key elements from the UK AI strategy. Significantly, the UK’s proposed approach may diverge in some respects from the EU’s GDPR. For example, the UK strategy includes consideration of whether to drop Article 22’s restrictions on automated decision-making, and whether to maintain the UK’s current sectoral approach to AI regulation.  The UK will publish a White Paper on regulating AI in early 2022, which will provide a basis for further consultation and discussion with interested or affected groups before draft legislation is formally presented to the UK Parliament.

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