SEC: Cybersecurity Procedures Must be Reasonably Designed to Fit Specific Business Models

The Securities and Exchange Commission recently announced that a Des Moines-based broker-dealer and investment adviser has agreed to pay $1 million to settle charges related to its failures in cybersecurity policies and procedures surrounding a cyber intrusion that compromised personal information of thousands of customers. This is the latest SEC action demonstrating that cybersecurity must be tailored to the practices of the business.

The SEC charged Voya Financial Advisors Inc. (VFA) with violating the Safeguards Rule and the Identity Theft Red Flags Rule, which are designed to protect confidential customer information and protect customers from the risk of identity theft.  This is the first SEC enforcement action charging violations of the Identity Theft Red Flags Rule.

The Importance of a Cybersecurity and Disaster Recovery Plan

Kennyhertz Perry Partner Braden Perry was featured in Bluelock’s recent whitepaper, discussing the importance of a cybersecurity and disaster recovery plans. Perry said, “In the event of a malicious attack, a company should have systems in place to keep operational or at least backups where the company is not affected or very slightly affected. In the event of a total disruption of the business, it is too late to mitigate and you will likely see dramatic costs to the business, especially small or mid-sized businesses. Being proactive rather than reactive is the key.”

Perry’s comments not only show the importance of a proactive plan, but a disaster recovery procedure if a disruption of business occurs. As a member of the Kennyhertz Perry’s Privacy, Cybersecurity, and Breach Management practice group, Perry assists clients in prevention, developing robust information security programs, including administering internal compliance and risk assessments, which include the development and implementation of corporate policies and procedures required for compliance with state and federal privacy and security laws, and information security best practices; information security policies; records retention and management policies.

Braden Perry Discusses Email Discretion with Ragan.com

Kennyhertz Perry Partner Braden Perry was recently interviewed by Ragan.com about the timely issue of email discretion. Perry, a cybersecurity attorney who trains companies in email usage and emerging technological topics, provided the following advice: Communicate what you need to communicate, and only that. Leave sarcasm and jokes for the water cooler.

“You should always think that any email you write could be published on page one for all to read,” he says. “Ask yourself: Is it necessary to write? Or can I call and provide the same information?”

As a former federal enforcement attorney, Perry knows the dangers of errant emails. Frequently, an email would be the smoking gun necessary for prosecution.

Braden Perry Discusses Rouge Insiders and Cybersecurity with Digital Guardian

Kennyhertz Perry partner Braden Perry was one of several data security and cybersecurity attorneys asked to compare the risks of insider threats vs. outsider threats with Digital Guardian, a leading platform for digital protection. Perry, a member of the firm’s Regulatory & Compliance Practice Group, discussed how insiders have are more dangerous to an entity due to their access to data. “There’s not much, besides compartmentalization and monitoring, that you can do if an insider wants to reach data,” Perry said.

Preparation and prospective mitigation are keys to limiting opportunities: ” While no single strategy fits all, practicing basic cyber hygiene would address or mitigate a vast majority of security breaches. Being prepared if an intrusion occurs is also critical and having a communications method for response, actively monitoring centralized host and networks, and including enhanced monitoring to detect known security events is a must. With a well-oiled cyber policy, you can mitigate outsiders significantly,” he said.