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On March 15, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued proposed amendments (the “Proposal”) to Regulation S-P, which governs the treatment of nonpublic personal information about consumers by broker-dealers, registered investment advisers, registered investment companies, and transfer agents.  The Proposal would broaden the existing “safeguards” and “disposal” rules under Regulation S-P, and would require the entities to adopt “incident response programs.”…

Continue Reading SEC Continues to Shine Light on Cyber and Data Security: Proposes Amendments to Regulation S-P

Determined to maintain its position as a pioneer for consumer privacy rights, California is again among the first to take action to tackle issues of children’s safety and privacy online with the enactment of the California Age-Appropriate Design Code (the “Code”), which was signed into law by Governor Gavin Newsom on September 15, 2022.  Once effective on July 1, 2024, the Code would, among other things, prescribe rules that require  businesses to design their online products and services with children’s privacy in mind and identify and mitigate any risks of material detriment to children that arise from businesses’ online data practices. …
Continue Reading California Refuses to “Kid Around” on Children’s Privacy With Enactment of the California Age Appropriate Design Code

On August 1, 2022, Robinhood Crypto LLC (“RHC”) entered into a Consent Order with the New York Department of Financial Services (“DFS”) based on “serious deficiencies” related to anti-money laundering (“AML”), cybersecurity, and virtual currency that were identified in DFS’s examination of RHC covering the period from January to September 2019.
Continue Reading DFS Enters Consent Order with Robinhood Crypto for Deficiencies in AML, Cybersecurity, and Virtual Currency Compliance

On May 3, 2022, the SEC announced that it was renaming the Division of Enforcement’s Cyber Unit as the Crypto Assets and Cyber Unit, and significantly increasing its size with the addition of 20 new positions.[1]  In the same announcement, the SEC articulated specific areas of focus within the digital assets space, including:  (i) crypto asset offerings; (ii) crypto asset exchanges; (iii) crypto asset lending and staking products; (iv) decentralized finance (“DeFi”) platforms; (v) non-fungible tokens (“NFTs”); and (vi) stablecoins.
Continue Reading SEC Nearly Doubles Size of Digital Asset Enforcement Team

The SEC and a consortium of 32 states recently announced a $100 million settlement with BlockFi Lending LLC over its crypto lending product, BlockFi Interest Accounts. The SEC alleged BlockFi had violated the securities laws by failing to register its interest-bearing crypto lending product as a security, failing to register itself as an investment company,…

February 17, 2022 was a busy day for the Department of Justice and its growing cyber portfolio.  First, Deputy Attorney General Lisa O. Monaco delivered remarks at the Annual Munich Cyber Security Conference, stressing the Department’s efforts to confront cyber criminals and its increasing focus on disruption and prevention, even if doing so would limit criminal prosecutions.  Additionally, the Department announced the appointment of the first Director of the National Cryptocurrency Enforcement Team, which was established to address criminal misuse of cryptocurrencies and digital assets.
Continue Reading Developments at Justice: The Deputy Attorney General Talks Cybersecurity and the National Cryptocurrency Enforcement Team Gets its First Director

On January 24, 2022, Securities and Exchange Commission Chair Gary Gensler gave a speech at the Northwestern Pritzker School of Law’s Annual Securities Regulation Institute signaling the SEC’s intention to step up its cyber-related regulatory and enforcement efforts.  Gensler described the continued rise in cybersecurity incidents targeting the financial sector as a serious threat to the nation’s economy and critical infrastructure, with costs potentially in the trillions of dollars.
Continue Reading SEC Chair Previews Ramp Up in Regulation and Enforcement in the Cybersecurity Context

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

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