NIS 2 Directive: Navigating the challenges of implementation, impact, and scope
The NIS 2 directive establishes a regulatory framework aimed at improving the level of cybersecurity across the EU.
The internet knows no borders, neither do we. Our global team of cybersecurity response experts work across borders, combining data protection, privacy, regulatory, white collar and litigation expertise in order to deliver seamless crisis management and legal advice, whenever and wherever needed.
The digitalization and free flow of information has transformed global business. However, with increased opportunities have come new and increased risks, together with complex legislative regimes that can vary significantly by jurisdiction, and are constantly evolving. Even the most conscientious company can become the victim of a cybersecurity incident, such as the stealing of client or company information, or a ransomware attack. We work with a wide range of multinational companies to manage their cybersecurity risks, developing rapid response plans, providing time-critical crisis management advice, and working with clients to manage any resulting legal issues that may arise.
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On May 21, 2024, the SEC's Director of the Division of Corporation Finance issued a statement on cybersecurity incident disclosures in light of the SEC's new cybersecurity disclosure rules. Our summary of this statement and key take-aways from White & Case's survey of cybersecurity disclosures is below.
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In an article for The Times, White & Case partner Lawson Caisley discusses why it could become increasingly common for UK directors to "face personal liability and regulatory censure as a result of their company suffering or mishandling a cyberbreach".
Two legal cases in the US in the past month suggest that regulators and prosecutors are becoming more determined to take personal action against directors and senior executives who fail to deal adequately with cyber security breaches.
On March 9, 2022, the Securities and Exchange Commission ("SEC") proposed rules that would require public companies to make prescribed cybersecurity disclosures.
In The Legal 500's newly released In-House Lawyer Magazine a group of White & Case lawyers has contributed a legal briefing on trends in German commercial litigation.
In recent years, demands for payments in cryptocurrencies have become the ransom of choice for cyber extortionists and other online frauds. As a result, the English Court's powers are increasingly being called upon.
Ninth Circuit Decision Highlights Importance of Updating Risk Factors to Address Material Developments, including those relating to Cybersecurity Risks.
Consistent with its increasing activity in the cybersecurity enforcement space, in March 2021, the NYDFS issued its first penalty under the Cybersecurity Regulation. This client alert explores the settlement and offers takeaways on the areas of focus by the NYDFS in enforcement actions under the Cybersecurity Regulation.
Is a data subject entitled to compensation from a controller or processor if the data subject's GDPR rights have been infringed, even if they have not suffered any kind of material damage?
Cybersecurity has been a mainstay of quarterly board agendas for years.
The fourth webinar in our 2020 Autumn Webinar Series covered crucial steps you should be taking to protect against cybersecurity threats and what you should do when disaster strikes.
Hot on the heels of the California Attorney General's rulemaking process for the California Consumer Privacy Act ("CCPA"), California voters have passed a ballot initiative to expand and create new privacy rights for consumers.
In the past few years, cybersecurity has taken on increasing importance in the eyes of lawmakers and regulators.
UK law enforcement can now obtain an order against a person in or operating in the US for the production of or access to electronic data under a new ‘landmark’ US-UK data sharing agreement.
The COVID-19 crisis has exposed many companies to more cyber threats. Tim Hickman and John Timmons discuss what businesses need to do should a major incident occur.
Recent decisions in Singapore and New Zealand confirm that the courts are prepared to act to provide greater certainty and support to stakeholders in cryptoassets.
The High Court has determined that Bitcoin (and other similar cryptocurrencies) can be considered property under English law, and could be the subject of a proprietary injunction. The Court granted the injunction to assist an insurance company to recover Bitcoin that it had transferred in order to satisfy a malware ransom demand.
Organisations are facing increasing uncertainty in assessing global notification and disclosure obligations and making a determination of whether to notify or disclose a privacy violation or security incident in today's complex regulatory environment. This article offers six steps companies should consider when navigating this complex process.
This article examines the impact of the UK Network and Information Systems Regulations 2018 (SI 2018/506) (NIS Regulations) on organisations post Brexit and their obligations under applicable cybersecurity law.
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In recent years, demands for payments in cryptocurrencies have become the ransom of choice for cyber extortionists and other online frauds. The COVID-19 pandemic and resulting public health lockdowns precipitated an explosion in such activity with record cases of cyber fraud being recorded.1 This is notwithstanding that Bitcoin and most other mainstream cryptocurrencies use a distributed ledger to record transactions which should, in principle, make it easy to "follow the money" once a payment has been made. In practice, the absence of KYC checks and the lack of regulatory oversight means that the identity of cryptocurrency wallet owners, and therefore the holders of the funds can often be difficult to determine. Cybercriminals also deploy sophisticated techniques, such as placing Bitcoins in a "tumbler",2 which makes it difficult to trace tainted funds back to their original source. As a result, the English Court's powers are increasingly being called upon in actions against unknown parties demanding payment in cryptocurrencies.
Following AA v Persons Unknown3 – in which the High Court determined that Bitcoin and other cryptocurrencies can be considered property under English law, and could therefore be the subject of a proprietary injunction – there has been a number of cases in which the Court has deployed its existing powers to tackle novel issues.4
AAA plc & ors v Persons Unknown [2021] EWHC 2529 (QB) represents the latest of these types of cases, although in this instance, the Court's powers were used pre-emptively, that is, to avoid a ransom having to be paid in the first instance.
Notably, the judgment demonstrates the Court's willingness to issue: (1) injunctions against persons unknown, and (2) anonymity orders protecting the identity of Claimants in circumstances where disclosure of their identity would defeat the purpose of the application.
The Claimants/Applicants were a group of associated companies nominally referred to in the judgment as AAA plc, BBB Limited, CCC Limited, DDD plc and EEE Limited (the "Group"). The Defendants were "Persons Unknown" only identified as "Ben" and "Bryan".
In July 2021, AAA plc (the "AAA") became aware of a website published by purported "investors" in AAA accusing the Group of fraud. The website stated that the Group was made up of various shell companies designed to appear the same as AAA for the purpose of defrauding investors. It was alleged that their function was to secure initial investment and then report misleading results to shareholders in order to secure further investment. The website went on to criticise AAA's CEO, its investor team, and accountants before stating that they had "a few methods in the pipeline" to help them get their money back.
The purported "investors" had paid for the website to be prominently advertised on a search engine, and the allegations were repeated across various social media accounts. Consequently, existing and potential investors were likely to encounter these allegations of fraud if searching for AAA and the wider Group online.
In response, AAA hired a cyber investigator who was able to contact the person(s) behind the website. Their identities ultimately remained unknown, only signing off emails as "Ben" and "Bryan". The "investors" demanded payment in Bitcoin in exchange for the removal and deletion of the website and social media accounts, and desisting from the same conduct in respect of the Group.
As a first step, the Court was willing to grant the anonymity order, and thus depart from the principle of open justice because:
The Court was also satisfied that there were "good reasons" for not notifying the Defendants. There was a real risk that the Defendants would take steps to defeat the purpose of the injunction by carrying out their threat of publishing allegations of fraud online.
The Claimants' underlying claim against the Defendant was for unlawful means conspiracy.
Applying the principles from American Cynanamid,5 the Court found not only that the Claimant had established that there was the lower "serious issue to be tried", but, in line with Section 12(3) of the Human Rights Act (given the interference with freedom of speech), the Applicant had surpassed the higher threshold: that it was likely to establish at trial that the publication should not be allowed. This was because:
Second, the Court held that the Claimants would not be adequately compensated by an award of damages, while the Defendants were unlikely to suffer any real loss from the grant of an interim injunction. As such, the balance of convenience was tilted in favour of the Claimants and granting the injunction.
This judgment highlights how readily the English Court is prepared to issue injunctions against persons unknown "hidden behind aliases and the cloak of secure emails."
As cybercriminals deploy increasingly sophisticated techniques to hide their identity and source of funds while perpetrating frauds online, the growing jurisprudence in this sphere is a welcome addition and can only be bad news for Defendants.
1 NCA on Cyber Crime – National Crime Agency.
2 A cryptocurrency mixing program which mixes tainted cryptocurrency funds with others to obscure the funds' original source.
3 AA v Persons Unknown who demanded Bitcoin on 10th and 11th October 2019 and others [2019] EWHC 3556 (Comm).
4 Fetch.ai Ltd and another v Persons Unknown Category A and others [2021] EWHC 2254 (Comm).
5 American Cyanamid Co v Ethicon Ltd [1975] AC 396.
6 Pepperall J at [25.3].
Valerie Seah (Trainee Solicitor, White & Case, London) co-authored this publication
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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