Securities attorneys often work on transactions that involve cybersecurity and privacy issues. They also handle litigation and investigations involving cyber breaches or other related matters.
Developing a Cybersecurity Action Plan
Developing an action plan to reduce your firm’s risk of cyberattacks is essential. A third party can help identify blindspots in your infrastructure, test for vulnerabilities and weaknesses, create a security policy, implement security measures, train staff, and provide ongoing monitoring. Cybersecurity strategies must address data confidentiality, integrity and availability, collectively known as the CIA Triad. This involves providing access to authorized users only, transforming sensitive information into a form unauthorized individuals cannot read, and detecting intrusions to networks.
As cybersecurity attacks and breaches have become more common, regulators are taking notice. For example, the SEC proposes new rules requiring companies to disclose cybersecurity risks and incidents in their SEC filings and may require disclosing insurance coverage for cyber incidents. A securities attorney can help you develop a comprehensive cybersecurity strategy that protects your client’s personal and financial information and helps minimize the impact on your firm if a breach occurs. In addition, a securities lawyer can perform privacy- and cybersecurity-specific due diligence in private equity deals, mergers and acquisitions, and other corporate transactions.
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Identifying Cybersecurity Issues
Cybersecurity issues affect companies of all sizes and types. While it may seem daunting to keep up with cybersecurity best practices, implementing such basic safety measures as strong passwords, keeping software up to date and not clicking on suspicious links can drastically reduce the risk of a cyber attack. For larger public companies, it is important to disclose any material cybersecurity incidents in current reports on Form 8-K within four business days after determining whether the incident is material. A company must amend previous disclosures when new or additional information becomes available. Smaller businesses are a major target for hackers because they typically have different resources to invest in security protocols and procedures than bigger organizations. As a result, many small businesses find themselves victims of high-profile data breaches with sensitive personal information ending up on the “dark web,” where it can be sold for large amounts.
Developing a Cybersecurity Strategy
A business must plan its security strategy once the risks and vulnerabilities have been identified. This includes setting cybersecurity business goals, evaluating the company’s technology, selecting a security framework, reviewing existing security policies and constructing a cyber incident response plan. A robust cybersecurity strategy focuses on proactively identifying and reducing threats. It also prepares the company for possible incidents, allowing it to preserve its reputation and reduce harm to employees, customers, stakeholders, vendors and others. This approach is especially critical given the growing incidence of cyber attacks and the threat to privacy regulations, which can expose a business to significant liability. Everyone on board must understand the objectives and their role to make the most of a cybersecurity strategy. Regular, open communication with all staff members is the most effective way. This will help build buy-in and support for the plan. It will also ensure that the company stays up-to-date as new vulnerabilities emerge. It is essential to remember that threats will always continue evolving, so a strategy must be regularly reviewed and updated.
Developing a Cybersecurity Plan
When it comes to a company’s cybersecurity strategy, the first thing you need to do is establish aims and objectives. This is the foundation for your business logic and security goals, and it should include a review of your firm’s current capabilities and technological evaluation. Your security plan should also include policies for preventing and mitigating the risk of data breaches. Examples of policies that can help include a data retention policy, an email encryption policy, and an incident response plan. You should also include plans to educate employees about best practices and potential threats. This can be done through various means, such as lunch, learns, and annual awareness events. A well-trained and informed workforce can be an effective deterrent against cyber attacks, reducing the likelihood that your firm falls victim to a ransomware attack or other malicious behavior. This can also decrease the time it takes to detect and respond to a breach. It can also lessen the damage caused by a disgruntled employee who may try to steal confidential or proprietary information.
Developing a Cybersecurity Response Plan
As hacker attacks become increasingly sophisticated, it’s critical to prepare for these threats by developing a cybersecurity response plan. This includes identifying your most critical assets and creating standard operating procedures. In the event of a cyberattack, this helps your team prioritize what needs to be done to contain and mitigate damage. Once the breach is contained, it’s important to eliminate any threat activity and remove any compromised systems. You also want to ensure your data is recoverable, addressing any vulnerabilities contributing to the attack. Finally, conducting a lessons-learned meeting after the incident is important, assessing what went wrong and how you can improve your cybersecurity measures in the future.
This is especially helpful if you’re facing a regulatory investigation or is the target of a securities fraud lawsuit related to your cybersecurity risks and incidents (we recently discussed a new Securities and Exchange Commission (SEC) proposal on cyber disclosures for RIAs and funds). Taking proactive steps like this can help minimize the impact of these issues.