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 October 21, 2024, the US Securities and Exchange Commission ("SEC") Division of Examinations ("Examination Division") announced its 2025 Examination Priorities ("Report"). Investment advisers and broker-dealers should ensure that policies, procedures and surveillance efforts related to these priorities address concerns outlined in the Report.
The U.S. Securities and Exchange Commission's ("SEC") Division of Enforcement has recently brought a spate of enforcement actions relating to key topics for public companies. These include enforcement actions related to cybersecurity incident disclosure, director independence and Regulation Fair Disclosure ("Reg FD") violations, which are described below, and actions based on Section 13 and 16 beneficial ownership filings, as discussed in our prior alert.
On July 18, 2024, a New York federal judge dismissed most of the US Securities and Exchange Commission's ("SEC") claims against SolarWinds Corp. ("SolarWinds" or the "Company") and its Chief Information Security Officer ("CISO"), Timothy G. Brown, in connection with the Company's cybersecurity practice.
The NIS 2 directive establishes a regulatory framework aimed at improving the level of cybersecurity across the EU.
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.
On October 30, 2023, the US Securities and Exchange Commission ("SEC") announced that it filed charges against SolarWinds Corp. ("SolarWinds" or the "Company") and its Chief Information Security Officer ("CISO") in connection with the SEC Division of Enforcement's ("Enforcement Division") investigation of a cyberattack.
On July 26, 2023, the Securities and Exchange Commission ("SEC"), in a 3-2 vote, adopted rules that will require public companies to make prescribed cybersecurity disclosures.
In this brief three-minute video, London-based partner Lawson Caisley, Chair of White & Case's Global Cyber Risk Committee, shares his insights on governing cyber risk at the corporate level and some of the challenges of cyber risk management in the boardroom. Filmed at the Digital Directors Network (DDN) Domino 2023 conference on digital and cybersecurity governance.
In this short three-minute video, Washington, DC–based partner F. Paul Pittman discusses the implications of the proposed new SEC rules on cybersecurity governance and what corporate boards can do now. Filmed at the Digital Directors Network (DDN) Domino 2023 conference on digital and cybersecurity governance.
The potential for cybersecurity threats and attacks looms large and the technology companies developing new products and services play a constant game of cat-and-mouse with hackers and cybercriminals for control of cyberspace. Here are six points to consider when analyzing cybersecurity risks and protections.
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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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.
At the beginning of October, Uber's former chief security officer was found guilty of criminal obstruction charges for failing to report a cyber breach to the authorities. This is believed to be the first time a US company executive has been criminally prosecuted over a cyber breach, and he now faces a prison sentence of up to eight years. Earlier this week, the Federal Trade Commission (FTC) announced that it had taken action against the CEO of Drizly (an online drinks delivery business) over the company’s security failures which led to a cyber breach that exposed the personal information of 2.5 million customers.
Given the global nature of regulatory trends and the fact that cyber breaches are increasingly a fact of business life, UK-based directors will be justifiably concerned at the prospect of a potential increase in the risk of personal liability arising from cyber breaches. However, a closer look at the facts of each of these cases suggests that aggravating factors prompted the authorities to target the individuals concerned.
In the first case, the criminal charges against Uber's former chief security office (James Sullivan) arose from the fact that, when the relevant cyber breach occurred in 2016, Uber was already under investigation by the FTC for an earlier cyber breach in 2014. The 2016 breach involved a hacker accessing customer records and demanding a US$100,000 payment, which was ultimately paid by Mr Sullivan's team. Mr Sullivan did not inform the FTC of the incident despite its ongoing investigation, and prosecutors alleged that he also took steps to conceal the incident within the company. Mr Sullivan's actions led to him being fired by Uber.
In the second case, the FTC's decision to take action against the CEO as well as the company itself was driven by the fact that both were alerted to problems with the company's security procedures following a cyber attack two years earlier. Despite this, the company failed to implement basic cyber security measures while publicly claiming to have appropriate protections in place. The FTC's proposed order requires the company and the CEO to implement an information security programme to protect customer data. The FTC stated that this "ensures the CEO faces consequences for the company's carelessness".
Both these cases therefore involved aggravating factors that may place them outside of a 'typical' scenario where directors are faced with a cyber breach and try their best to deal with it honestly and reasonably.
Turning to the UK, while it is the case that directors could face personal liability and regulatory censure as a result of their company suffering or mishandling a cyber breach, we have seen very few attempts to hold directors or senior managers personally liable in such circumstances. To date, legal claims and regulatory action have been mainly directed at the company suffering the breach. However, directors should not be complacent. UK regulators have long made clear their view that cyber security is a board level issue that requires serious and meaningful senior engagement. Directors must therefore assume that, like the FTC, UK regulators will be looking very closely at the conduct of individual directors in relation to any cyber breach suffered by their company and that, if similar aggravating factors were present, action against individual directors might be considered.
In addition, attempts to hold directors personally liable for negligence and breach of duty are becoming more common in the English courts, for example in relation to ESG-related issues. The fact that cyber security is now firmly established as a key business risk means that directors can increasingly expect a cyber breach suffered by their company to result in more pressure to demonstrate that they had taken reasonable steps both to prevent a breach and to prepare to handle any breach that occurred.
Against that backdrop, UK boards would be well advised to heed the FTC's warning: "CEOs who take shortcuts on security should take note".
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
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.
