Articles Posted in Policies and Procedures

At the airport, in a coffee shop or hotel lobby? Think twice before logging on to that free Wi-Fi.

What’s not to love about free, public Wi-Fi?  It’s free. It’s easy. A couple of clicks and you’re connected to the world.

When you’re on the go, there will always be a need to check your email, send a document to a client, touch base with someone in the office, or review the balance in your bank account. You can take care of life’s business from almost anywhere, and public Wi-Fi makes it easy.

It’s ease of use makes it a boon to hackers, as well. While you’re taking care of business, so are they.

Earlier this week, I was interviewed by Leonard Lee of Thomson Reuters Legal Current for a 20-minute podcast titled “Dangers of Public Wi-Fi”.  We discussed some of the things that can happen when you’re using public Wi-Fi, including:

  • Spoofing. Rogue computers can spoof you, pretending to be something they’re not, and capture your data when you click on their link.
  • Capturing passwords. More sophisticated hackers can enter your device stealthily and monitor everything you do (capturing keystrokes to passwords, for example).
  • Depositing malware. Hackers can also deposit malware into your computer. This can endanger not only your own data – if you’re connected to your company’s network you’re risking the integrity of data shared by everyone back in the office.
  • Peeking the old fashioned way. And remember, in a public place it’s still possible for hackers to perform a hack the old fashioned way – by looking over your shoulder and reading your screen.

The safest way to go? Don’t use public Wi-Fi. Continue reading

The cybersecurity breaches this month of Equifax and Deloitte—both firms that tout the value of their data and security acumen—show that no company is immune to hacking.

But there is one thing that smart companies can do, both before and during a breach, and that is to develop and deploy an appropriate narrative when a security disaster strikes. That narrative needs to hew to the facts, take into account the known unknowns, and appeal not to shareholders or the press but to customers and regulators. Done right, these statements can differentiate between a recoverable data breach and a cybersecurity-related corporate disaster.

What makes this so difficult for companies and CEOs is that the right response often goes against all they’ve learned about positioning the company. Let’s dissect those impulses.

  1. Shareholder value is intact. A company sees shareholders as its most important constituency and wants to reassure them. Actually, you have no idea the impact on shareholder value, because you have no idea the full extent of the breach, how the market will receive it, and how customers and regulators will react. Incorporating this concept into any narrative is ill-advised at best.
  2. We have this under control. Company leaders do not want to exhibit weakness. However, as part of an initial statement, there is only a remote chance that the situation is under control. It takes time to learn the extent of a breach, both its breath, duration, and ultimate impact. Far better to say you are working with experts, regulators and consumer advocates to understand the extent of what may have been compromised, and that you are pushing forward diligently in this regard.
  3. We are doing all we can to mitigate the effects. Company executives often have a bias toward action. You may want to do that, but that’s impossible until you discover the scope of the data loss. Regulators are not interested in immediate solutions. They want to know that you are doing all you can to learn about the situation, not the specifics about the Band-Aids or tourniquets. They want to know your long-haul commitment.

Continue reading

cybersecurity-umbrella-protecting-businessman-300x300

Small businesses understand that they are challenged with all the cybersecurity issues that large companies face. But often they fail to act preemptively under the false assumption that the resources of a large company are necessary to manage cyber threats.  Small businesses are often surprised to learn that effective cybersecurity strategies are within their reach and that, in many cases, small businesses can respond to threats faster and more effectively than large companies.

I recently participated as a speaker for a conference focused on the future of cybersecurity and how small businesses can protect themselves. Ariento’s Up on Cyber 2017 Conference at the UCLA James West Alumni Center was attended by numerous small business owners, and I enjoyed the informed questions posed by the audience.

You can view a video of my 45-minute presentation, the Current Landscape of Cybersecurity Law as it Relates to Small Businesses, in which I cover the following issues:

  • What’s new in data threats
  • Where do your obligations and liabilities come from
  • Privacy Policies – protection and threat
  • Risk Assessment – the first step to risk reduction
  • Cyberinsurance – what and why
  • Responding to a data breach

Like businesses of all size, small businesses are at risk of being hacked. The threat of compromising customer and employee privacy, and the possibility of losing their reputations – not to mention their businesses – are good reasons that all small businesses should act proactively to put cybersecurity programs in place.

 

Robert E. Braun is the co-chair of the Cybersecurity and Privacy Law Group at Jeffer Mangels Butler & Mitchell LLP. Bob helps clients to develop and implement privacy and information security policies, negotiate agreements for technologies and data management services, and comply with legal and regulatory requirements. He helps clients to develop and implement data breach response plans, and he and his team respond quickly to clients’ needs when a data breach occurs. Contact Bob at RBraun@jmbm.com or +1 310.785.5331.

JMBM’s Cybersecurity and Privacy Group counsels clients in a wide variety of industries, including accounting firms, law firms, business management firms and family offices, in matters ranging from development of cybersecurity strategies, creation of data security and privacy policies, responding to data breaches and regulatory inquiries and investigations, and crisis management. The Cybersecurity and Privacy Group uses a focused intake methodology that permits clients to get a reliable sense of their cybersecurity readiness and to determine optimal, client-specific approaches to cybersecurity.

padlock-cybersecurity-300x203

It’s ironic: when global threats are in the news every day, their ubiquity makes them easy to ignore. Whether they be political threats, climate threats, or data security threats, we can become numb to ever-present risk. Add in the chorus of advice from the growing number of providers, and even those who want to act become paralyzed by choice and complexity.  Cybersecurity is no exception – the daily deluge of breach notices and press reports of massive attacks has made us less, not more, sensitive to the threat.

Crisis fatigue can be compounded with defeatist thinking, believing that no matter what you do, you will still be hacked and have your data compromised.  So it is no surprise that while companies know data security should be a top priority, in reality, it’s easy to focus on more urgent – but less essential – items.

Cybersecurity faces additional hurdles that make it even challenging to address.  By identifying those hurdles, however, firms may be able to overcome these barriers and move forward on the path to minimizing one of the greatest risks your company faces.

Data Security Is Expensive – But Not as Expensive as the Alternative

Implementing a cybersecure environment requires a commitment in technology, training, and adapting to the constant rate of change and upgrading processes. The extra steps needed for the simplest of tasks, such as logging in, add to the daily cost of doing business.

Gartner estimates that worldwide spending on data security this year will hit $90 billion. It’s understandable that a CEO would see that as money lost from corporate value. But these expenditures should be seen  as an investment to preserve corporate value. Breaches are much more expensive and disruptive than the budgeted, planned improvements to systems, which can be controlled and implemented over time.

Intelligent and consistent technology upgrades, combined with regular training for all employees, are, in the end, better for a company’s bottom line than crisis management and costly technology remediation after the fact. Creative corporate leaders reframe the expense question and find budget for what’s vital.

Data Security Seems Really Complicated

For most of us, data security is complicated. We aren’t IT professionals, and venturing into the cybersecurity world is a challenge. Those who suffer any amount of technophobia may assume that they don’t know it and, more dangerously, that they can’t learn it. The technology community can reinforce this fear by speaking a foreign language and using unfamiliar terminology, all of which creates another barrier for non-technical executives and managers who need to understand the issues sufficiently enough to make intelligent decisions. Non-technical company management often feel that they are at the mercy of the IT experts. Even those who master important concepts in data and cybersecurity may doubt that knowledge, as there can be a tendency on the tech side to stress just how complicated things really are, reinforcing the need for their expertise. Continue reading

Web analytics concept - Multicolor version

Middle-market companies have cultures, goals and business needs that are distinct from larger firms, and nowhere is that more true than with cybersecurity.

Fortune 500 companies and brands with household names are much more likely to recover their reputations following a data breach.  While breaches are costly in financial terms to all companies, the damage to the brand of a middle-market company may not be survivable.  Large companies can weather the storm of negative publicity and loss of reputation, but mid-markets often cannot:  60% of middle-market companies that are hacked are out of business within one year.

This presents a near-paralyzing scenario to middle-market managers – the mere spectre of a data breach presents business risks that are difficult for them to fathom.

In our work with middle-market companies, we’ve developed effective strategies to help companies respond to the risk and protect their vital digital assets.  In fact, when the process is managed well, middle-market companies can respond to cybersecurity threats more quickly and effectively than larger businesses. Continue reading

Web analytics concept - Multicolor versionWhile there is no nationwide cybersecurity program, the Federal Trade Commission has brought more than 50 actions claiming that the cybersecurity practices of a variety of companies in a variety of industries. While these actions have primarily been administrative and resulted in settlements, and the specifics of each order apply only to the company affected, these actions are instructive as to what the FTC expects of cybersecurity programs.  A byproduct of the FTC’s actions is a guide to companies to create better privacy and security policies and programs.  While these cases don’t necessarily identify how to run “gold-standard” programs, they identify what the FTC expects as minimum standards for efforts to protect data.

The FTC has said that most enforcement actions it has brought involve “basic, fundamental security missteps.” Many are human error, but there are also plenty that show deficiencies in cybersecurity risk assessments and programs.  This piece describes baseline guides; companies should consult qualified counsel for specifics. Engaging counsel itself on these issues is a sign to regulators that a company takes cybersecurity seriously. But doing it correctly depends on engaging top legal counsel and experienced advisors early on.

Human Factor.  No cybersecurity program is ironclad as long as human error exists and the skills of hackers evolve at the same rate as technology itself. But many cybersecurity breaches are the result of more simple mistakes. The FTC requires “reasonable” efforts, not complete security.

It’s also important to note that cybersecurity solutions are not one-size-fits-all, even for companies within the same industry. Prevention programs depend on the unique circumstances and business practices of each company. Regardless of company or industry, however, a demonstrated commitment to security is required, both to satisfy the government and to protect valuable corporate and customer assets.  Continue reading

The Big Data deluge - A businessman tries to crunch the numbers at his desk.pngCybersecurity horror stories tend to focus on government agencies, retail outlets, health care institutions, and other companies serving consumers. But business professionals such as lawyers, accountants and business managers are increasingly at risk of attack, and may be less prepared to handle a cyber assault.

Late last year, three Chinese citizens were criminally charged in the United States with trading on confidential corporate information obtained by hacking into networks and servers of two prominent law firms, reported to be Cravath, Swaine & Moore LLP and Weil, Gotshal & Manges LLP, working on sensitive and highly confidential mergers. This was market-moving data, including information on Cravath’s work and information on an acquisition of its client, Pitney Bowes.

Prosecutors said the hackers gained access to the law firm’s computer system using an employee’s credentials. The hackers then installed malware on the firm’s servers to access emails from lawyers, including a partner responsible for the Pitney deal. Similarly, the hackers obtained information about an Intel acquisition from the IT system of its counsel, Weil Gotshal. The hackers made millions of dollars trading on the confidential information about the deals, and exposed the danger law firms and other professional service firms face.

What’s worse, consider this: in all likelihood, there are probably dozens of professional service firms that have experienced cybersecurity breaches and don’t even know it. Continue reading

Last year, SEC Chair Mary Jo White named cybersecurity as the biggest risk facing financial markets. But the risk isn’t limited to the financial industry – even a casual review of breach reports in the mainstream press shows that cybersecurity is a risk common to all companies in any industry.  The challenge facing companies is how to prepare for what seems to be inevitable, and how to do it in an efficient and economical basis.

The key element in preparing for a data breach is less a technical matter than a traditional evaluation of business risk.  Companies regularly analyze the risks of business decisions, and just as regularly, recognize that risk analysis requires legal advice.  Evaluating cybersecurity risk is no different – it requires that a company understands the risks it takes, which risks it is willing to assume as part of its business and which risks need to be eliminated or shifted (through insurance, contractual arrangements or otherwise).  Understanding this, obtaining competent legal advice before a breach is a critical aspect of any cybersecurity plan.

Despite this fact, many companies focus their data protection programs in IT, and only bring in their lawyers late in the game to bless their cybersecurity measures. While legal expenses are always a concern, companies will reap a greater return on their overall cybersecurity investment by soliciting advice early on, and stand better odds a breach will be handled correctly and efficiently.

What can cybersecurity lawyers bring to the table?

Hand-in-Glove Collaboration

Perhaps most importantly, legal counsel commonly work with a variety of corporate players and are in a unique position to work hand-in-glove with IT, HR, and other functions to assess and reduce cybersecurity risk while still permitting a company to function efficiently. An experienced lawyer is often the best person to lead a team that establishes key protocols to avoid a breach, including policies and procedures for privacy, confidentiality, mobile device usage, record retention, and breach protocol.  Lawyers are particularly able to address the key elements of an effective cybersecurity plan. Continue reading

Cyber risk affects businesses of every size and industry. A data breach can lead to negative publicity, loss of customer confidence and potential lawsuits. There can be a variety of unanticipated – and costly – business disruptions.

Just ask the owners of the Romantik Seehotel Jaegerwirt hotel, in the Austrian Alps, which recently had their systems frozen by hackers, resulting in the complete shutdown of hotel computers. The hackers breached the hotel’s key card system, making it impossible for guests to enter their rooms and preventing the hotel from reprogramming the cards.

The hackers did not scrape guests’ credit card data, as has happened with other hotel data breaches, but instead demanded a ransom payable in Bitcoin. The Romantik Seehotel Jaegerwirt – which was fully occupied at the beginning of ski season – paid the ransom, at which time control of the key card system was restored.

While highly disruptive, it’s easy to imagine how it could have been worse. Fortunately, the hotel located and fixed the backdoor left by the hackers (which the hackers tried to exploit almost immediately) and secured their systems.

Vulnerability to hackers seeking to take control of a building’s system is a very real threat to organizations of all kinds: hospitals, hotels, law firms, research facilities, banks, retailers – virtually any kind of business that is housed in a “smart” building. Continue reading

3679571-business-peopleOne of the challenges – perhaps the biggest challenge – to achieving cybersecurity is complexity.  Every day we are faced with new threats as hackers display their creativity and new technologies and approaches to addressing those threats.  Governments, both U.S. and foreign, regularly propose laws and regulations better to protect us – and to confuse us.  And underlying all of it is technical language which seems designed to prevent us from understanding the challenge of cybersecurity.

It’s no wonder that one of the things our clients most often ask is where to start – what is one thing that they can do to start the process of becoming cybersecure.  And the fact is that there is one thing that will put you on the road to cyber security:  Creating a culture of security.

While many firms claim to have a “culture of security,” it’s unclear that they have made the commitment to engage every aspect of their operations, and every one of their personnel, in the goal of creating a cybersecure environment.  Cybersecurity requires a firm to create in each of its personnel a “human firewall.”

An enterprise-wide focus on security requires a focus on people, not on technology.  However important security technology may be – and we do not suggest that a company skimp on its technology budget! – most technological defenses can be overcome by individuals, whether through lack of training, negligence, or malice.  Consequently, bringing individuals into the cybersecure culture and making them stakeholders will have an immediate and measurable impact on cybersecurity efforts.

So, then, how is a cybersecure culture achieved?  A few essential steps are required: Continue reading