The U.S. Departments of State, Treasury, and Homeland Security, and the Federal Bureau of Investigation recently released a joint advisory (the “Advisory”) outlining a number of cyber theft, ransomware, and money laundering operations originating from organized hacking groups sponsored by the North Korean government. According to the Advisory, these state-sponsored hacking groups have attempted to steal as much as $2 billion through cyber-enabled thefts on financial institutions as of late 2019, and are known to use automated digital currency transactions to launder their ill-gotten gains. These cyber-theft operations are among the latest in the list of high-profile breaches these actors are believed to have been responsible for, including the WannaCry 2.0 ransomware that hit a number of hospitals and corporations in the United States and abroad in May 2017, and the Sony Pictures Entertainment breach in November 2014.
Continue Reading U.S. Cyber Intelligence Warning Highlights Security Threat From Nation-Sponsored Advanced Persistent Threats (APTs) – Part 1

The Genesis of Three Competing Federal Bills

In 2018, there were numerous congressional and industry proposals aimed at addressing privacy on the federal level. Although none ever crystalized as federal law, the sheer number of lawmakers introducing proposals and getting involved in the debate made clear that privacy would be a focus in 2019. As 2019 began, there was hope that the various state privacy statutes being enacted and debated were putting even more pressure on the federal government to enact bipartisan federal privacy legislation. The California Consumer Privacy Act’s (CCPA) January 1, 2020 go-live date also seemed to be increasing pressure on Congress to act. Nowhere was the combination of hope and pressure more pronounced than in the Senate Committee on Commerce, Science, and Transportation. Throughout 2019, bipartisan discussions on federal privacy legislation seemed to be progressing. Those talks ultimately broke down towards the end of 2019 and resulted in three separate, rival legislative proposals: COPRA, CDPA, and CDPSA.
Continue Reading Federal Privacy Legislation: Where Are We and Where Are We Going?

Despite its unassuming name, the EARN IT Act has substantial cybersecurity implications, its relative obscurity in today’s coronavirus-obsessed headlines notwithstanding. The Eliminating Abusive and Rampant Neglect of Interactive Technologies (“EARN IT”) Act has already caught the ire of the collective internet and technology spheres due to its dramatic alteration of the safe harbor provisions of Section 230 of the Communications Decency Act (Title V of the Telecommunications Act Of 1996). Although still in the early stages of the legislative process, curbing Section 230’s protections has already garnered substantial support from leaders in both parties, including Joe Biden and Ted Cruz. Therefore, EARN IT’s progress merits close monitoring.
Continue Reading Putting in the Work: What Does the EARN IT Act Have in Store for Average Businesses

Most companies that can do so have sent their employees home to work, which means that many employees have brought their home to work. Businesses have transitioned from maintaining a centralized workplace with a standardized data security protocol managed by knowledgeable IT personnel to a decentralized system of home offices with uneven or unenforced data security policies, largely managed by end users with minimal or no technological expertise.

Consequently, companies have been forced to introduce into their system the very vulnerabilities that they normally spend substantial time and money trying to eliminate. These vulnerabilities present a compliance issue for companies legally required to keep certain information confidential–such as health providers, law firms, or defense contractors–and for those otherwise subject to regulatory oversight. A confidentiality breach therefore presents a legal risk as well as a business risk, so companies must address squarely the data security implications of a home-based workforce.
Continue Reading Working From Home Data Security Tips, Part 2

The videoconference platform Zoom has seen a surge in users since the coronavirus pandemic. Teleworkers are relying increasingly on Zoom for virtual meetings, and as a HIPAA-compliant videoconferencing program, Zoom for Healthcare has gained popularity among healthcare providers in particular. New York’s Attorney General has asked Zoom to explain its privacy policies, and additional scrutiny is likely to follow.

Hackers have noticed. Since the beginning of the year, reports show 1,700 registrations including the word “Zoom,” with 4 percent containing suspicious characteristics. A click on a fake Zoom invitation could install InstallCorePUA, which opens the door to malicious software installations.
Continue Reading Working From Home Data Security Risks

Bad actors love crises. The forced telecommuting of millions of employees (and the attendant exponential increase in use of remote access technologies), coupled with real fears and concerns regarding the spread of COVID-19, have produced a fertile environment for an increase in cyberattacks. Trend Micro reports that COVID-19 is being used in a variety of malicious campaigns including email spam, business email compromise (i.e., using stolen information to initiate fraudulent wire transfers), malware, ransomware, and malicious domains. Trend Micro estimates that nearly 66% of these attacks involve email spam. Both Trend Micro and Sophos have separately reported discovery of what Sophos calls a “dirty little secret” scam: users receive an email asserting that the sender knows their whereabouts and other personal information, and threatens that if the user refuses to pay a fairly large sum ($4000 in one instance), they will infect your family with coronavirus. Nasty, eh?

With this increased risk environment, and everyone’s guard down a bit as we focus on simply trying to keep doors open, it is important for those responsible for data security to undertake basic steps to lessen the success of these attacks. These steps can include:
Continue Reading Strengthening Your Cybersecurity in the Age of the Coronavirus

We regularly work with financial institutions to navigate the challenges of implementing, maintaining, and using security procedures for commercial customers’ use of treasury management services. Security procedures are an integral part of the relationship between the financial institution and its commercial customers. Financial institutions offer (and frequently require) commercial customers to use the institution’s security procedures, which are agreed to be commercially reasonable, to originate payment orders (e.g., wire transfers and ACH Entries) from the customers’ accounts.

Issues often arise when one or more of a customer’s authorized users is not able to use his standard security procedures to access a financial institution’s physical or electronic payments systems to either originate or confirm a payment order. Due to the COVID-19 outbreak and concern over the implementation of preventative measures, including more companies asking or requiring employees to work remotely, financial institutions should consider which customers may need to update, amend or supplement the ways that its customers can make payments, whether this be through adding authorized users or implementing alternative methods to send payment orders.
Continue Reading Considerations for Financial Institutions Regarding Security Procedures for a Remote Workforce

On January 27, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a statement designed “to assist market participants in their consideration of how to enhance cybersecurity preparedness and operational resiliency.” Companies regulated by the SEC, or organizations that work with companies the SEC regulates, should review OCIE’s observations of best practices and consider whether they are meeting OCIE’s expectations.

OCIE’s observations fall into several categories.

Governance and Risk Management. As OCIE notes, “[e]ffective cybersecurity programs start with the right tone at the top . . . .” OCIE also notes that effective programs include, among other things, (i) a risk assessment of cybersecurity threats; (ii) written cybersecurity policies and procedures to address said risks; and (iii) implementation and enforcement of those policies, including testing and monitoring and continuous evaluation of those policies.
Continue Reading SEC Issues Statement on Cybersecurity and Operational Resiliency

On February 20, the United States District Court for the District of Columbia ruled that a law firm must defend against a malpractice claim grounded in a data breach it suffered during a cyberattack.

In this case, the plaintiff, Guo Wengui, alleged that he was a well-known Chinese dissident who had exposed systemic corruption and widespread human rights abuses by the Communist Party of China (“CCP”), China’s ruling political party. Following this exposure, the plaintiff alleged, persecution from the Chinese government drove him to seek political asylum in the United States. The plaintiff further alleged that the Chinese government continued its persecution of him even after his arrival in the United States. This persecution allegedly involved the coordination of a “malicious negative propaganda campaign” against him, including the coordination of a demonstration outside his home.
Continue Reading Law Firm Malpractice Decision Teaches Cybersecurity Lessons