Vermont’s “Data Brokers” Law is a Glimpse into the Future for Many Industries

Cybersecurity has been a field where the concept of state governments acting as legislative laboratories has been observed in real time, with multiple states passing different pieces of legislation every year. One of the more unique laws passed in 2018, and effective as of January 1, 2019, is Vermont’s descriptively titled “act relating to data brokers and consumer protection.” Although unknown to most consumers, there is a booming industry of “data brokers” who act as middlemen between companies who collect data and those looking to…
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National Counterintelligence and Security Center Launches Effort to Protect Industry Against State Actors

On January 7, 2019, the National Counterintelligence and Security Center (NCSC), which coordinates counter-intelligence efforts within the U.S. government, announced that it would begin disseminating its “Know the Risk, Raise Your Shield” materials in an effort to assist the private sector in guarding against threats from foreign intelligence entities and other adversaries.  This campaign appears to have been prompted by the Trump administration’s efforts to drive U.S. companies to better protect their trade secrets from foreign hackers.  This comes on the heels of recent cyber-attacks…
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Pennsylvania Federal Court Dismisses Law Firm’s Case Against Bank in Social Engineering Cyber Attack

The unfortunately reality of cyber theft is that it’s much like any other type of theft – even if the criminal is caught, it’s unlikely that the ill-gotten gains will ever be fully recovered. There are simply too many ways to hide their destination or make them disappear. This often means the victim will seek other avenues for recouping losses, including filing a civil action against entities or individuals who allegedly could have helped prevent the theft. In the case of O’Neill, Bragg & Staffin,
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Long-struggling ‘Google Plus’ Social Network to be Shutdown after Security Breach Affects 500,000

On Monday, October 8, 2018 Google disclosed a security breach it discovered months ago that put at risk the personal data of hundreds of thousands of Google Plus users. In March, Google discovered, and fixed, the bug that allowed outside software developers to gain access to personal information on Google Plus users, including names, email addresses, ages, occupations and relationship status. The company’s decision to not immediately report the software bug has some concerned that Google cannot be relied on to protect privacy. Google…
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SEC’s First Cybersecurity Enforcement Has Many Lessons

The Securities and Exchange Commission recently announced its first ever cyber-related enforcement action in a case that all companies should look at as a refresher on cybersecurity hygiene. In the Matter of Voya Financial Advisors, Inc. was brought against the publicly traded company that manages over $500 billion after a security breach through several of its brokers acting as independent contractors for the company. These brokers typically accessed Voya clients’ PII through a password protected web portal while using their own IT equipment and networks.…
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Security Breach Compromises 50 Million Facebook Accounts

In the wake of concerns that the social media giant collects too much personal data, Facebook, Inc. discovered a security breach on September 25, 2018 that affected almost 50 million accounts. Recent privacy regulations, including those recently enacted in the European Union, may have forced Facebook into promptly reporting the breach just three days after it was discovered. Based on the breaking-news reports, the FBI is working with Facebook to investigate the breach to determine the extent of the breach, what information was accessed, whether…
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Chili’s Carefully Announces Limited Data Breach

On May 11, 2018, Chili’s Grill & Bar learned that “some of [their] guest’s payment card information was compromised at certain Chili’s restaurants” as the result of a “data incident,” according to a press release on the company’s website. Preliminary investigations suggest malware was used to gather payment card information for purchases between March and April 2018. While such data incidents are increasingly common, Chili’s press release is notable for two reasons. Firstly, The release, presented as a letter to “valued guests,” provided…
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IRS Student Loan Application Program Breach Affecting up to 100,000 Taxpayers

On April 6, 2017, IRS Commissioner John Koskinen testified during a Senate Finance Committee meeting that the personal data of up to 100,000 taxpayers may have been compromised by hackers accessing both students’ and parents’ tax information through the Data Retrieval Tool (DRT), a free application for federal student aid data retrieval connected with the Free Application for Federal Student Aid (FAFSA). Obtaining such information allowed these hackers to file fraudulent tax returns and steal refunds. The last breach of this magnitude occurred in 2015,…
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The Yahoo Class Action: Plaintiff’s Bar Finds a New Cottage Industry

The only “surprise” in the Yahoo class action complaint, filed Friday, September 23, 2016, is that Yahoo issued a press release announcing the breach a mere one day earlier.  The class action complaint, undersigned by three law firms in San Francisco, Boca Raton, and New York, seeks certification for: “All persons within the United States whose personal information was accessed following the data breach that Yahoo announced in a press release on September 22, 2016.”  Indeed, the complaint makes a number of allegations relating directly…
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Something to Keep an Eye On: Insurers and Insureds to Duke it Out in Data Breach Coverage Suit

A new Indiana coverage litigation regarding a CGL policy (and umbrella policy) may provide more guidance about how courts will approach data breach coverage under traditional insurance products. In National Fire Insurance Company of Hartford v. Medical Informatics Engineering, Inc. et al. (N.D. Ind., No. 16-cv-152), two CNA companies initiated a declaratory judgment action seeking a ruling they do not have the duty to defend or indemnify Medical Informatics Engineering, Inc. or NoMoreClipboard, LLC (collectively Medical Informatics) in relation to lawsuits filed against Medical Informatics. …
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