Industry: Financial Services

The Cybersecurity and Infrastructure Security Agency (CISA) teamed up with the Federal Bureau of Investigation (FBI) to issue a joint warning of cyber-attacks emanating from Iran and targeting U.S. federal agencies and businesses.  These hackers target vulnerabilities in virtual private networks (VPNs), which organizations use to allow remote network access.  Once the hackers gain access through a VPN, they export data, sell access to the network, and have the ability to install ransomware.  This is just the latest example of criminals exploiting vulnerabilities associated with the current remote working environment.

Last week, a magistrate judge in the Eastern District of Virginia held that a breach report prepared by Mandiant (a digital forensics investigator, among other things) in response to the Capital One data breach was not protected by the attorney work product doctrine. 

In recent weeks, we have seen growing threats to cybersecurity and privacy from malicious actors seeking to exploit the COVID-19 pandemic. As companies transition their employees to remote working and focus their efforts on core business continuity, hackers are actively targeting companies’ cloud-based remote connectivity, lack of multi-factor authentication, and potentially insecure digital infrastructure to exploit vulnerabilities. The need for robust cybersecurity measures is more pressing than ever, and governmental organizations are issuing calls to action.

The aftermath from one of the largest data breaches in U.S. history is nearing the end, as the presiding judge approved a proposed class action settlement resolving claims arising from Equifax’s September 2017 data breach.  As previously reported, approximately 147.9 million U.S. consumers’ personal information was compromised by that breach.

As readers of the Data Security Blog will know, the California Consumer Privacy Act (“CCPA”) becomes operative on January 1, 2020.  The CCPA is the most sweeping consumer privacy law in the United States, covering most for-profit businesses that do business in California and collect the personal information of “consumers,” meaning California residents. 

It’s been almost two years since New York’s top banking regulator implemented one of the nation’s most stringent cybersecurity regulations.  Since then, thousands of financial institutions have recruited chief information security officers, implemented cybersecurity programs, performed penetration testing, and imposed encryption requirements on their most sensitive information.

Yesterday, by e-mail and on its website, the California Department of Justice (DOJ) announced that it would hold “six statewide forums to collect feedback” in advance of the rulemaking process for the California Consumer Privacy Act (CCPA).  The announcement did not include proposed rules or regulations, which must be adopted by July 1, 2020.

This is the second post in our two-part series about DOJ’s revised guidance on its “Best Practices for Victim Response and Reporting Cyber Incidents.”  In the first installment, we looked at DOJ’s recommendations for preparedness.  Today, we turn to the basics of data breach incident response and a list of DOJ’s “don’ts” when dealing with a hacker.

In Accenture’s 2018 State of Cyber Resilience for Banking & Capital Markets study, the consulting firm reported the rate at which cyber-attacks on banking and capital markets firms are successful dropped from 36 percent in 2017 to 15 percent in 2018. Despite the improvement, one in seven cyber-attacks remain successful – begging the broader question of what else, if anything, banks and capital market firms could be doing to protect themselves from attack?

On its face, last week’s report that the number of data breaches reported last year to New York’s Attorney General spiked to an all-time high of 1,583 – up 23 percent from 2016 – was not good news.

But behind the numbers are even more disturbing trends. Start with the fact that hacking – the handy work of outside intruders – was the leading cause of reported breaches last year, accounting for 44 percent of reported breaches. Hacking also accounted for nearly 95 percent of all personal information exposed. In second place was employee error or negligence, which represented 25 percent of last year’s reported breaches.

Today, financial institutions with ties to New York are spending their Valentine’s Day learning how to use the New York State Department of Financial Services (DFS) web portal.

Almost a year ago, the DFS unveiled one of the most aggressive efforts in the nation to crack down on cybercrime in the banking and insurance industries. And by tomorrow, more than 3,000 firms are required to file through the agency’s online portal their first ever compliance certificate, swearing that their organization has satisfied the first phase of requirements under the state’s new cybersecurity regulation.

Second in a two-part series.

Last week, in the first part of this series, we examined several key aspects of New York’s proposed data security law, Stop Hacks and Improve Data Security Act or SHIELD Act. In our second and final installment, we discuss three additional aspects of the proposed law.

The federal Computer Fraud and Abuse Act of 1986 (“CFAA”) has generated controversy and disagreement among courts and commentators regarding the scope of its application.  The statute, 18 U.S.C. § 1030, which provides for both criminal and civil penalties, prohibits accessing a computer or protected computer “without authorization” or in a manner “exceeding authorized access.”  Courts are divided as to the meaning of these phrases, yet the U.S. Supreme Court recently declined the opportunity to resolve the circuit split that has developed, leaving the exact scope of this important statute in question.

Equifax Inc.’s interim CEO, Paulino do Rego Barros Jr., issued the company’s second public apology this morning for the massive data breach that has affected as many as 143 million U.S. consumers.

In a Wall Street Journal op-ed, Barros acknowledged the company’s ball drop in handling the breach and promised to “act quickly and forcefully to correct our mistakes.” He said the company will introduce a new service that would permit consumers to control access to their personal credit data.

Today, New York Governor Andrew M. Cuomo announced that he has directed the Department of Financial Services (DFS) to issue a new regulation requiring “credit reporting agencies to register with” the DFS, as well as comply with the Department’s “first-in-the-nation cybersecurity standard.”  According to Governor Cuomo, the Equifax breach was a “wakeup call,” and New York is now “raising the bar for consumer protections” with the “hope” the DFS’s approach “will be replicated across the nation.”

Since the massive data breach at Equifax Inc. was disclosed late Thursday (see our blog here), the news has only gotten worse for the Atlanta-based credit monitoring agency. 

Banks, insurance companies and other financial institutions have only a few days left to comply with the first wave of requirements under New York’s controversial new cybersecurity regulation.

Companies subject to New York’s Department of Financial Services (DFS) new cybersecurity regulation should be preparing to comply with the first round of requirements by the upcoming August 28th deadline: enacting a cybersecurity program and policies, implementing user access privileges, designating a Chief Information Security Officer (CISO), employing qualified personnel, and implementing an incident response plan.

Over the past several years, we have witnessed a fundamental shift in orchestrated cyber-attacks from hacking credit card data and healthcare information to targeting businesses, their operations and bottom lines.

New York’s Department of Financial Services (DFS) has issued additional guidance for compliance with the state’s sweeping cybersecurity regulation that went into effect earlier this year.  Companies covered by the regulation must comply with the first round of requirements by August 28th.

A new survey by the Ponemon Institute reports that less than half of the financial institutions covered by New York’s sweeping new cybersecurity regulation say they will “likely” meet next February’s compliance deadline. And even more stunning is the fact that only 13% of those institutions surveyed reported “with certainty” that they would be in full compliance with the regulation by next year.

Faced with an approaching August 28^th deadline, the more than 3,000 financial institutions that do business in New York should be knee-deep in implementing the first wave of requirements under the State’s sweeping and unprecedented cybersecurity regulation.

Increasingly, states are enacting cybersecurity regulations for financial institutions and investment advisors. Following New York’s groundbreaking regulation (which we have covered in detail here), Colorado recently proposed changes to its state securities act that would impose new cybersecurity requirements on broker-dealers and investment advisors that operate in the state. 

New York’s top banking regulator would like the state’s new sweeping – and highly detailed – cybersecurity regulation to serve as a national model for insurance companies in safeguarding their institutions from cybercrime.

New York State Department of Financial Services Superintendent Maria T. Vullo is scheduled to discuss the state’s new “first in the nation” cybersecurity regulation later this week at the National Association of Insurance Commissioners annual meeting in Denver.