In summer 2018, a new Indian Personal Data Protection Bill was released by a Committee of Experts formed under the Chairmanship of Justice B.N. Srikrishna (the “Bill”), accompanied by a report titled “A Free and Fair Digital Economy: Protecting Privacy, Empowering Indians.” After several months’ hiatus, reports are emerging of renewed impetus from India’s Ministry of Electronics and Information Technology (“MEITY”) for the Bill to be put before Parliament.

The proposed introduction of the Bill continues a global trend in the revision of data protection laws: from California to Canada, from Bahrain to Brazil, many jurisdictions have recently proposed, or are in the process of adopting, new, stricter data protection legislation that, to varying degrees, bears the hallmarks of the recently-effective EU General Data Protection Regulation (“GDPR”).

As the global data protection map evolves, what should multinational organisations do to remain compliant? National legislatures are contributing to a global patchwork of data protection policy and each new law has been shaped by different political and cultural motivations. Consequently, areas of incompatibility between regimes are becoming visible.

This article recaps on the key provisions of the proposed Bill, examines potential incompatibilities with the GDPR, and concludes with what this means for multinational organisations who may be required to navigate both frameworks.

Please click here to read the full article.

On January 24 2019, Canada’s Office of the Superintendent of Financial Institutions (“OSFI”) released an Advisory detailing new requirements for Canadian federally regulated financial institutions (“FRFIs”) to report cyber incidents within 72 hours.  FRFIs include banks, trust companies, loan companies, life insurance companies, property and casualty insurance companies, and fraternal benefit societies.

The new reporting requirements become effective on March 31, 2019. Continue Reading Canadian Financial Regulator Publishes New Cyber Incident Reporting Guidelines Effective March 2019

On February 20, the Securities and Exchange Commission (the “SEC” or “Commission”) issued a cease-and-desist order against Gladius Network LLC (“Gladius”) concerning its 2017 initial coin offering (“ICO”).  The SEC found that the Gladius ICO violated the Securities Act of 1933’s (“Securities Act”) prohibition against the public offer or sale of any securities not made pursuant to either an effective registration statement on file with the SEC or under an exemption from registration.[1]  While this is far from the first time that the SEC has found that a particular ICO token meets the definition of a “security” under the Securities Act,[2] this is notably the first action involving an ICO token issuer that self-reported its potential violation.  Due to this, and Gladius’s cooperation throughout the investigation, the SEC stopped short of imposing any civil monetary penalties among its ordered remedial measures. Continue Reading SEC Issues First ICO Enforcement Action Against a Self-Reporting Token Issuer

On February 7, 2019, the German antitrust agency, the Federal Cartel Office (“FCO”), imposed limitations on Facebook’s current practice of collecting and processing user data and prohibited using the related terms of service.  After an almost three-year long investigation, the FCO found that some of Facebook’s business practices amounted to an abuse of a dominant position.  For the first time, the FCO based its abuse-of-dominance analysis also on whether the dominant company complied with the GDPR – throwing compliance with the GDPR into their competition law assessment.[1] Continue Reading Germany Limits Facebook’s Data Collection and Processing, Refers to GDPR

At the end of January, partners Daniel Ilan and Alexis Collins participated in a panel co-hosted by The Conference Board and Cleary Gottlieb to discuss cybersecurity and board oversight.

Moderator Doug Chia, executive director of The Conference Board, Nick Mankovich, Vice President and Chief Information Security Officer (“CISO”) at medical technology firm Becton Dickinson, Daniel, and Alexis discussed current cybersecurity risks, how cyber-attacks are changing, and the role that management and the board should play in ensuring that companies are prepared. Continue Reading Cleary Partners Participate in Panel Discussion on Cybersecurity and Board Oversight

On January 22, the Financial Industry Regulatory Authority (“FINRA”)[1] released its 2019 Risk Monitoring and Examination Priorities Letter (the “Letter”).  The Letter highlights material new priorities for FINRA examinations in the coming year, as well as priorities in areas of ongoing concern.  The topics highlighted in this year’s Letter reflect FINRA’s increasing focus on its members’ interaction with, and adoption of, innovative financial technologies, as well as its implicit acknowledgement of the ability for such innovations to assist in regulatory compliance.  The new priorities highlighted in the Letter include several related to FinTech, including online distribution platforms, use of regulatory technology (or “RegTech”), and supervision of digital asset businesses.  In priority areas of ongoing concern, the Letter confirmed that FINRA will continue to focus on reviewing the adequacy of firms’ cybersecurity programs.  Below we detail FINRA’s discussion of these priorities and analyze them in the context of other recent guidance and enforcement actions. Continue Reading FINRA 2019 Examination Priorities Letter Includes Focus on FinTech and Cybersecurity

On January 25, 2019, the Illinois Supreme Court held in Rosenbach v. Six Flags Entertainment Corporation that plaintiffs are not required to allege actual harm in order to seek damages against private entities under the state’s Biometric Information Privacy Act (BIPA).  BIPA regulates companies’ collection, retention, and disclosure of biometric identifiers.  It further provides a private right of action for persons “aggrieved” by a violation of the Act for recovery of liquidated damages, injunctive relief, attorneys’ fees, and costs.  By allowing suits for technical violations of BIPA’s notice and consent provision to go forward, the Rosenbach decision will likely encourage the filing of new cases under the Act and may influence the interpretation of data privacy laws in other states. Continue Reading Illinois Supreme Court Rules Plaintiffs Are Not Required to Allege Actual Injury to Sue Under the Biometric Information Privacy Act

In 2018, data privacy and cyber breaches made headlines throughout the year.

Major companies continued to suffer data breaches, highlighting the risks and potential costs of cyber incidents across industries.  At the same time, a growing and overlapping thicket of data security and privacy regulations—within the U.S., European Union, Latin America, and elsewhere—continued to increase compliance costs and regulatory risks.  This memo surveys some of the key cybersecurity and data privacy developments of 2018, including the major data breaches and cyberattacks, regulatory and legislative actions, and notable settlements and court decisions.

In addition, we identify some key takeaways from 2018, which include the importance of rapid response and timely disclosure, cyber diligence in M&A transactions, effective management of third-party vendor risk, and protecting privilege.  We also highlight key areas to watch in 2019, including GDPR enforcement, efforts to pass a U.S. federal privacy law, responses and potential changes to California’s new privacy law, the adoption of comprehensive privacy laws in more U.S. states and non-U.S. jurisdictions, and heightened U.S. litigation and enforcement risk.  Data security and privacy will undoubtedly remain a priority for boards and senior management, as well as regulators and enforcement authorities.

Please click here to read the full alert memorandum.

Nearly a decade ago, WikiLeaks ushered in the age of mass leaks.  Since then, corporations, governments, public figures and private entities have increasingly had to reckon with a new reality: that vigilantes, activists, extortionists and even state actors can silently steal and rapidly disseminate proprietary information, including customer data and other sensitive information.  Last month, the Department of Justice (“DOJ”) indicted four individuals based on information first revealed in the “Panama Papers” leak.  This marks a significant milestone in law enforcement’s reliance on evidence based on an unauthorized mass leak of information.  While leaks and hacks are not a novel phenomenon—in 1971, the New York Times published top secret documents on the Vietnam War and, in 1994, a paralegal leaked tobacco industry documents that ultimately cost the industry billions of dollars in litigation and settlement costs—the frequency, scale and ease of dissemination of leaked information today presents a difference not only of degree, but of kind.  The new Panama Papers-based criminal case will likely raise a host of novel legal issues based on legal challenges to the DOJ’s reliance on information illegally obtained by a third party, as well as information that would ordinarily be protected by the attorney-client privilege.  In this memorandum, we discuss the potential issues raised by the prosecution and their implications.

Continue Reading U.S. Criminal Prosecution Based on Panama Papers Hack Raises Novel Legal Issues

On January 7, 2019 the National Futures Association (“NFA”) provided additional guidance on the required cybersecurity practices of certain NFA members by amending its Interpretive Notice entitled NFA Compliance Rules 2-9, 2-36 and 2-49: Information Systems Security Programs (the “Interpretive Notice”).  The Interpretive Notice currently requires each NFA member futures commission merchant (“FCM”), commodity trading advisor, commodity pool operator, introducing broker (“IB”), retail foreign exchange dealer, swap dealer (“SD”) and major swap participant to implement a written information systems security program (“ISSP”) and enact other cybersecurity procedures sufficient to identify, address and respond to cybersecurity incidents.  The amendments to the Interpretive Notice are informed by NFA examinations of member ISSPs since the Interpretive Notice became effective in March 2016.  They are intended to clarify certain common questions posed by NFA members related to internal approvals of the ISSP and employee training.  The amendments additionally impose a new notification requirement for specified cybersecurity incidents. Continue Reading NFA Amends Interpretive Notice Regarding Cybersecurity Programs