On March 14, 2018, the Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) announced parallel criminal and civil charges against Jun Ying, the former Chief Information Officer of Equifax’s United States Information Systems, for selling his shares of Equifax stock before Equifax publicly announced that it had suffered an immense data breach. These charges come in the wake of recent SEC guidance on ensuring corporate insiders do not trade in securities while in possession of material nonpublic information about cybersecurity incidents.
Adding to the chorus (or cacophony) of regulatory voices on the cybersecurity front, the SEC has recently issued new interpretive guidance concerning cybersecurity-related disclosures that public companies are required to make under federal securities laws.
Last week, NYS DFS began sending out e-mail notices to individuals stating that they had failed to comply with the Certification of Compliance requirement under 23 N.Y.C.R.R. § 500.17(b), which mandates that a Covered Entity under the regulations certify compliance annually. The deadline for certification was February 15, 2018.
Last September, shortly after Equifax disclosed a massive data breach, regulatory agencies moved quickly to adopt regulations intended to better protect consumers from data breaches. Last week, Congress took a first step toward codifying such protections.
On November 30, three Senate Democrats introduced the now third pending bill concerning data breach response and substantive data security requirements, all three of which came in the wake of the Uber and Equifax data breaches, and the stunning revelation that Uber hid the breach for over a year. Indeed, as is now well known, Uber went so far as to pay a hacker or hackers to conceal the breach and delete the compromised data.