Archives: Cyber Liability

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Sixth Circuit: Data Breach Victims’ Heightened Risk of Future Harm Establishes Article III Standing

One of defendants’ most significant arguments in opposing data breach victims’ negligence and breach of privacy claims has been that the claimants that have not suffered actual fraud or identity theft can show no cognizable injury and therefore lack Article III standing to assert their claims. Appellate decisions in the Seventh and Ninth Circuit have previously taken … Continue Reading

Target Corporation Cybersecurity-Related Derivative Litigation Dismissed

For some time now, many commentators, including me, have been predicting that cybersecurity-related litigation could become an important part of the D&O litigation environment. And that may yet happen. For now, however, the results in the recent cybersecurity-related cases have been, from the plaintiffs’ perspective, not particularly promising. On July 7, 2016, in the latest … Continue Reading

Federal Agencies Joining the Data Security Enforcement Action Bandwagon

Until now, the primary federal agency regulating data security has been the Federal Trade Commission. Indeed, in August 2015, the Third Circuit in the Wyndham Worldwide case affirmed the FTC’s regulatory enforcement authority against companies failing to take appropriate action to protect consumer financial information. However, other federal regulatory agencies are now increasing asserting their … Continue Reading

Guest Post: Law Firms and Cybersecurity: A Comprehensive Guide for Law Firm Executive Committees

There have been several very high profile news reports of significant law firm data breaches. It is not a mere coincidence that law firms increasingly are targeted in data breach attacks. Law firms have a trove of information that makes them highly attractive to cybercriminals. In the following guest post, John Reed Stark takes a look … Continue Reading

The Growing Risk of Payment Instruction Fraud and Related Insurance Coverage Problems

There recently has been a “dramatic rise” in the incidence of business e-mail compromise (BEC) scams, according to an April 4, 2016 alert from the Federal Bureau of Investigation (here). In these schemes, which are also often referred to as “social engineering fraud” or “payment instruction fraud,” scammers using official seeming email communications induce company … Continue Reading

Guest Post: The Need for Cyber Liability Insurance – Indian Perspective

Threats to data security and privacy are among the most important emerging exposures companies face. But it is not just companies in the United States that face these threats – these threats confront companies around the world. The purchase of insurance designed to deal with the liability exposures arising from these risks is an important … Continue Reading

Guest Post: Boards of Directors and Cybersecurity: Applying Lessons Learned From 70 Years of Financial Reporting Oversight

In this day and age, the members of the boards of directors of most companies understand that cybersecurity issues are both important and should be a board-level priority. But while these issues and responsibilities are now well-recognized, many boards still struggle to translate these issues into action. In the following guest post from John Reed … Continue Reading

Senate Bill Would Require Disclosure Concerning Corporate Boards’ Cybersecurity Expertise

It is not news that cybersecurity is a serious corporate and domestic security concern. But despite continuing revelations of high-profile data breaches, cybersecurity is an area (OK, one of the many areas) where Congress has been slow to act. While there is still as yet no comprehensive Congressional attempt to tackle cybersecurity as an issue … Continue Reading

Wyndham Worldwide Settles Data Breach-Related FTC Enforcement Action

According to the company’s December 9, 2015 press release (here), Wyndham Worldwide has reached a settlement with the Federal Trade Commission in the long-running and high-profile civil action the agency filed against the company and its affiliates in connection with data breaches at the company during the period 2008-2010. Under the terms of the settlement, … Continue Reading

FTC Data Breach-Related Enforcement Action Dismissed Based on Lack of Alleged Consumer Harm

Following the Third Circuit’s August 2015 decision in which the appellate court affirmed the Federal Trade Commission’s authority to pursue an enforcement action against Wyndham Worldwide alleging that the company failed to make reasonable efforts to protect consumers’ private information, there have been concerns that other companies experiencing data breaches could be the target of … Continue Reading

Book Review: A Cybersecurity Guide for Corporate Directors and Officers

We are long past the point where cybersecurity can be treated like an emerging, obscure or peripheral issue. The fact is that cybersecurity is now an important concern for every organization and enterprise. For that reason, cybersecurity is also now an important concern for everyone responsible for protecting and guiding those organizations and enterprises, including … Continue Reading

Guest Post: SEC’s Regulatory Action Against R.T. Jones: Did the Other Cybersecurity Shoe Just Drop?

On September 22, 2015, in what has been described as the SEC’s first cybersecurity-related enforcement action, the SEC announced that it had entered a settlement St. Louis-based investment advisor R.T. Jones Capital Equities Management, Inc., based on charges that the company had failed to establish the required cybersecurity policies and procedures in advance of a breach … Continue Reading

Book Review: Cyber Risks, Social Media and Insurance

We live in a world in which rapidly shifting technologies and communications modalities have changed the way we interact and conduct business. These new media and means of interaction have introduced innumerable benefits and efficiencies. Unfortunately, these new alternatives have down sides; among other things, they mean new risks and even liability exposures for both … Continue Reading

Guest Post: Preparing for a Cyber Caremark Lawsuit: Lessons from the Home Depot Derivative Complaint

As I noted in a September 9, 2015 post (here), a Home Depot shareholder has filed a data breach-related derivative lawsuit against certain of the company’s directors and officers, in which the plaintiff contends that the defendants breached their fiduciary duties by failing to ensure that customer credit card information was secure and protected. A … Continue Reading

Data Breach-Related Derivative Lawsuit Filed against Home Depot Directors and Officers

In early 2014, when plaintiffs initiated data breach-related derivative lawsuits against the boards of Target Corp. (here) and Wyndham Worldwide (here), there was some speculation that these cases might be the first of what could become a wave of data-breach related D&O lawsuits. But then the Wyndham Worldwide case was dismissed (refer here) and no … Continue Reading

When Data Hacks Lead to D&O Lawsuits, Actual and Threatened

Many observers, including even this blog, have speculated whether the rising wave of data breaches and cyber security attacks will result in litigation against the directors and officers of the affected companies. Indeed, in 2014, there were two sets of lawsuits filed against the boards of companies that had experienced high-profile data breaches, Target Corp. … Continue Reading