Cybersecurity

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Cybersecurity and data privacy continue to be among the most significant legal risks that businesses face today.

Last year brought a series of high-profile cyberattacks on major companies and U.S. infrastructure targets, continuing the trend seen in recent years. Regulators also brought a number of cybersecurity enforcement actions and announced new rules, guidance, and initiatives on ransomware and other cyber-related issues. In addition, after many years of debate, Congress made some progress in crafting legislation that would require certain companies to report significant cyberattacks and ransomware payments to the U.S. federal government. Companies should expect the demands of cybersecurity risk management and oversight to intensify as we enter 2022.
Continue Reading 2021 Cybersecurity and Privacy Developments in the United States

On January 19, 2022, District Judge Jesse M. Furman of the Southern District of New York dismissed a putative class action filed against men’s clothing store Bonobos, Inc., following an August 2020 data breach.  Judge Furman determined that a Bonobos customer whose personal information was stolen in the breach failed to demonstrate a sufficiently substantial risk of harm to establish standing to sue.

The decision in Cooper v. Bonobos reflects the increased uncertainty regarding the viability of suits for damages based solely on future risk of identity theft or fraud, in light of the Supreme Court’s recent decision in TransUnion LLC v. Ramirez.
Continue Reading Data Breach Class Action Against Bonobos Dismissed For Lack of Standing

For those following data privacy and consumer data protection trends, it should come as no surprise that enacting comprehensive legislation to regulate companies’ use of personal data has continued to be a focal point both internationally and in the U.S., at the federal, state and local levels. …
Continue Reading Navigating the Complex Regulation of Privacy and Data Protection

A 2021 survey of chief legal officers demonstrated that cybersecurity has overtaken compliance as the most significant legal risk that businesses face today. This should not come as a surprise as 2021 brought a series of high-profile cyberattacks on major companies and U.S. infrastructure targets.
Continue Reading Cybersecurity: Data Breaches, Ransomware Attacks and Increased Regulatory Focus

On January 4, 2022, the Federal Trade Commission (FTC) issued a clear warning to companies to remediate any software vulnerabilities associated with the Java-based Log4j software.  A critical security flaw was identified in Log4j, which is embedded in major software applications and is widely used by businesses in all sectors of the economy, this past December.  The security flaw potentially allows bad actors to gain unfettered access to affected computer systems and to any sensitive information they contain.

The FTC, which increasingly prioritizes privacy and data security enforcement, stressed that companies have a legal duty to mitigate known software vulnerabilities—including Log4j—that risk harm to consumers and may face legal action from the FTC if they fail to do so.…

Continue Reading The Federal Trade Commission Warns Companies to Remediate the “Log4j” Software Security Vulnerability

We are delighted that Anthony M. Shults has rejoined Cleary Gottlieb as a senior attorney from the U.S. Department of Justice (DOJ), where he served as acting Deputy Assistant Attorney General and Senior Counsel in the Office of Legal Policy and as Attorney-Advisor in the National Security Division. He is based in our New York office and will focus on cybersecurity, data privacy, and emerging technologies, as well as securities, appellate, and complex commercial litigation.
Continue Reading Cleary Gottlieb Welcomes Back Anthony M. Shults, Former Acting Deputy Assistant Attorney General and Senior Counsel at the Department of Justice

On December 6, 2021, the National Risk Committee of the Office of the Comptroller of the Currency (OCC) issued its Semiannual Risk Perspective for Fall 2021, which reports on key issues affecting the federal banking system.[1]  The report highlights the “evolving and increasingly complex” danger to the financial system from cyber threats, and encourages banks and financial institutions to adopt robust cyber controls to minimize operational risk.  It also stresses the need for risk-management policies and procedures that are tailored to new technological innovations, including cryptocurrencies and other digital assets.
Continue Reading The Office of the Comptroller of the Currency Warns of Increasingly Complex Cyber Risks for Banks

On November 18, 2021, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Board of Governors of the Federal Reserve System (Board) announced a final rule requiring banking organizations to notify their primary regulator of certain significant computer-security incidents as soon as possible and no later than 36 hours after they occur.[1]  The rule separately requires bank service providers to notify their bank customers if they experience a cyber incident that causes, or is reasonably likely to cause, a material disruption of services that lasts for four or more hours. …
Continue Reading Banking Regulators Approve Final Rule Establishing Cyber Incident Notification Requirements

On November 8, 2021, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated a virtual currency exchange, Chatex, and its infrastructure support providers on the list of Specially Designated Nationals and Blocked Persons (SDN List) for their role in facilitating financial transactions for ransomware actors.[i]  The Financial Crimes Enforcement Network (FinCEN) also released an updated advisory on ransomware and the use of the financial system to facilitate ransomware payments.[ii]  These actions were taken in furtherance of a coordinated “whole-of-government” effort to disrupt criminal ransomware actors and the virtual currency exchanges used to launder ransom payments around the world.
Continue Reading OFAC Ramps up Targeting of Ransomware-linked Actors and FinCEN Updates Ransomware Advisory

On 10 November 2021, the Supreme Court of the United Kingdom handed down its much-awaited judgment in the case of Lloyd v Google LLC [2021] UKSC 50.  The Supreme Court unanimously ruled that the claim, which is a representative action alleging breaches of the Data Protection Act 1998 (“DPA 1998”), could not proceed.

The Supreme…