Last week, a sharply divided U.S. Securities and Exchange Commission (“SEC”) significantly increased reporting requirements on public companies by adopting a Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure Rule (the “Rule”) that requires, among many other things, reporting of “cybersecurity incidents” within only four business days of a “materiality” determination (subject to limited exceptions involving national security or public safety, as determined by the U.S. Attorney General). As justification for this extremely short reporting period, the SEC cited the 72-hour “discovery” and 24-hour ransom payment reporting requirements under the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA”). But there is a critical distinction: The CIRCIA reporting requirements are confidential, whereas the reporting requirements under the Rule are public. Why does that matter? Among other reasons, a requirement for rapid public reporting may well lead to more cybersecurity incident class actions (whether meritorious or not).Continue Reading Cybersecurity Sheriffs Continue to Multiply and Crack Down – New SEC Rule Amps Up Public Company Pressure
Just over halfway through 2023, nationwide TCPA jurisprudence is focused on further delineating the scope of the TCPA. As the dust settles from earlier battles over defining ATDS requirements, the cases from this year are largely aimed at establishing who can bring a claim under the TCPA and what conduct the statute covers. We summarize here developments since our last update, listed in alphabetical order by topic area.Continue Reading TCPA Turnstile: Scoping out the TCPA – 2023 Midyear Update (TCPA Case Update Vol. 18)
In filing a lawsuit many have dubbed “the first of its kind,” a radio host in Georgia is claiming that OpenAI, the company behind the artificial intelligence chat platform “ChatGPT,” is liable for defamation.Continue Reading AI “Hallucinations” Can Inflict Real-World Pain
On March 15, 2023, the SEC reopened the comment period on proposed rules and amendments related to cybersecurity risk management and cybersecurity-related disclosure for registered investment advisers, registered investment companies and business development companies that were proposed on February 9, 2022. The initial comment period ended on April 11, 2022. A previous Vedder Price summary of the proposals is available here. Comments on the proposals are now due by May 22, 2023.Continue Reading SEC Reopens Comment Period for Investment Adviser and Investment Company Cybersecurity Proposals in Connection with Other Cyber and Data Privacy Related Proposals
In a highly anticipated decision, the Illinois Supreme Court recently held that a separate claim accrues under the Illinois Biometric Information Privacy Act (“BIPA” or the “Act”) (740 ILCS 14/1 et seq.) each time biometric data or information is collected and/or disclosed. The Supreme Court’s holding in Cothron v. White Castle System, Inc., 2023 IL 128004, is likely to have a profound impact on both the ability of plaintiffs to file BIPA claims and the calculation of liquidated damages for such claims. Continue Reading BIPA ALERT: Illinois Supreme Court Opens the Door to “Punitive, Crippling Liability” for Illinois Businesses
In a ruling that is unlikely to significantly alter the landscape of litigation under the Illinois Biometric Information Privacy Act (“BIPA” or the “Act”) (740 ILCS 14/1 et seq.), the Illinois Supreme Court recently clarified that a five-year statute of limitations is applicable to all claims under the Act. The Supreme Court’s holding in Tims, et al. v. Black Horse Carriers, Inc. clarifies the applicable statute of limitations period for BIPA claims, but does not address the critical question of when claims accrue under the Act.Continue Reading BIPA ALERT: Five Year Statute of Limitations Applicable to All BIPA Claims
As 2022 comes to a close, we wanted to look back at the most significant Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) decisions of the year. While we didn’t see the types of landscape-altering decisions that we saw in 2021, there’s still plenty to take note of. We summarize here the biggest developments since our last update, listed by issue category in alphabetical order.
Continue Reading TCPA Turnstile: 2022 Year in Review (TCPA Case Update Vol. 17)
The UK government’s reform of data protection laws and the mechanics of cross-border data transfers has accelerated in the first half of 2022.
Various European regulators, including the UK’s Information Commissioner’s Office (ICO) have expressed an intent to more closely monitor compliance with the data transfer rules and impose potentially significant fines where breaches are uncovered – capped in the UK at the higher of £17m or 4% of group worldwide turnover. US recipients of personal data gathered in the UK (whether from a group subsidiary or otherwise) should act now to assess their current compliance and plug any gaps.
In order for personal data gathered in the UK to be transferred, in a compliant manner, to the US a number of steps must be taken:Continue Reading UK-US Data Transfers Post Brexit
Public companies may soon have another regulation to worry about when it comes to their cybersecurity regime. Last week, citing the increase in cybersecurity incidents and the need for investors to be informed about cybersecurity risks in a timely matter, the Securities and Exchange Commission (SEC) proposed amendments to its rules that demand more of registrants when it comes to cybersecurity disclosures.Continue Reading SEC Proposes Mandatory Cybersecurity Disclosures
On February 9, 2022, the Securities and Exchange Commission (the SEC) issued proposed rules 206(4)-9 under the Investment Advisers Act of 1940, as amended (Advisers Act) and 38a-2 under the Investment Company Act of 1940 (Investment Company Act) (such rules collectively referred to as the ‘cybersecurity risk management rules’), to require investment advisers registered under the Advisers Act (advisers) and registered investment companies under the Investment Company Act (funds) to adopt and implement significant new written cybersecurity policies and procedures. At a high level, the proposed rules would require annual reviews, add new disclosure requirements, and add new SEC and investor reporting requirements, among other requirements.
Continue Reading SEC Proposes New Cybersecurity Rules for Investment Advisers and Investment Companies