Financial Privacy

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On June 25, 2018, the New York Department of Financial Services (“NYDFS”) issued a final regulation (the “Regulation”) requiring consumer reporting agencies with “significant operations” in New York to (1) register with NYDFS for the first time and (2) comply with the NYDFS’s cybersecurity regulation. Under the Regulation, consumer reporting agencies that reported on 1,000 or more New York consumers in the preceding year are subject to these requirements, and must register with NYDFS on or before September 1, 2018. The deadline for consumer reporting agencies to come into compliance with the cybersecurity regulation is November 1, 2018. In a statement, Governor Andrew Cuomo said, “Oversight of credit reporting agencies ensures that the personal private information of New Yorkers is less vulnerable to the threat of cyber attacks, providing them with peace of mind about their financial future.”

On July 1, 2018, HB 183, which amends Virginia’s breach notification law, will come into effect (the “amended law”). The amended law will require income tax return preparers who prepare individual Virginia income tax returns to notify the state’s Department of Taxation (the “Department”) if they discover or are notified of a breach of “return information.” Under the amended law, “return information” is defined as “a taxpayer’s identity and the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, assessments, or tax payments.” Continue Reading Virginia Amends Breach Notification Law Applicable to Income Tax Information

On March 20, 2018, the Financial Stability Board (“FSB”) delivered a note to finance ministers and central bank governors from the world’s top 20 economic powers, known as the G-20. The note provides a progress update on the FSB’s work to develop a common vocabulary of cyber terms.  Continue Reading Financial Stability Board to Develop International Cybersecurity Lexicon

On February 27, 2018, the Federal Trade Commission (“FTC”) announced an agreement with PayPal, Inc., to settle charges that its Venmo peer-to-peer payment service misled consumers regarding privacy and the extent to which consumers’ financial accounts were secured. This is the second significant FTC settlement in the past three months that addressed these issues, following the FTC’s action against TaxSlayer, Inc. and signals a renewed focus by the FTC on violations of the Gramm-Leach-Bliley Act’s (“GLBA’s”) Privacy and Safeguards Rules. Continue Reading FTC Announces Settlement for Venmo’s Alleged Violations of the GLBA’s Privacy and Safeguards Rules

On January 22, 2018, the New York Department of Financial Services (“NYDFS”) issued a press release reminding entities covered by its cybersecurity regulation that the first certification of compliance with the regulation is due on or prior to February 15, 2018. Covered entities must file the certification, which covers the 2017 calendar year, at the NYDFS online portal. Continue Reading NY Department of Financial Services Issues Reminder for Cybersecurity Filing Deadline

On November 8, 2017, the FTC announced a settlement with Georgia-based online tax preparation service, TaxSlayer, LLC (“TaxSlayer”), regarding allegations that the company violated federal rules on financial privacy and data security. According to the FTC’s complaint, malicious hackers were able to gain full access to nearly 9,000 TaxSlayer user accounts between October 2015 and December 2015. The hackers allegedly used the personal information contained in the users’ accounts, including contact information, Social Security numbers and financial information, to engage in tax identify theft and obtain tax refunds through filing fraudulent tax returns. The FTC charged TaxSlayer with violating the Gramm-Leach-Bliley Act’s Safeguards Rule and Privacy Rule.  Continue Reading FTC Announces Settlement with Tax Prep Service over Financial Privacy and Security Violations

On September 5, 2017, the FTC announced that Lenovo, Inc. (“Lenovo”) agreed to settle charges that its preloaded software on some laptop computers compromised online security protections in order to deliver advertisements to consumers. The settlement agreement (the “Settlement”) is between Lenovo, the FTC and 32 State Attorneys General.  Continue Reading FTC Announces Settlement with Lenovo Regarding Preinstalled Laptop Software

On August 7, 2017, the Securities and Exchange Commission (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert examining the cybersecurity policies and procedures of 75 broker-dealers, investment advisers and investment companies (collectively, the “firms”). The Risk Alert builds on OCIE’s 2014 Cybersecurity Initiative, a prior cybersecurity examination of the firms, and notes that while OCIE “observed increased cybersecurity preparedness” among the firms since 2014, it “also observed areas where compliance and oversight could be improved.” Continue Reading SEC Risk Alert Highlights Cybersecurity Improvements and Suggested Best Practices

In 2017, over $1.3 billion has been raised by start-ups through Initial Coin Offerings (“ICOs”), a relatively new form of financing technique in which a company (typically one operating in the digital currency space) seeking to raise seed money makes a “token” available for sale, and the token gives the purchaser some future right in the business or other benefit. Amidst much anticipation, on July 25, 2017, the Securities and Exchange Commission (“SEC”) released a Report of Investigation (“Report”) under Section 21(a) of the Securities Exchange Act of 1934 warning the market that “tokens” issued in ICOs may be “securities” such that the full breadth of the U.S. federal securities laws may apply to their offer and sale. The Report and a simultaneously released Investor Bulletin offer guidance and serve as a notice to the market that the SEC will be policing this new financing technique.

Read the full client alert.

On July 5, 2017, the FTC announced that Blue Global Media, LLC (“Blue Global”) agreed to settle charges that it misled consumers into filling out loan applications and then sold those applications, including sensitive personal information contained therein, to other entities without verifying how consumers’ information would be used or whether it would remain secure. According to the FTC’s complaint, Blue Global claimed it would connect loan applicants to lenders from its network of over 100 lenders in an effort to offer applicants the best terms. In reality, Blue Global “sold very few of the loan applications to lenders; did not match applications based on loan rates or terms; and sold the loan applications to the first buyer willing to pay for them.” The FTC alleged that, contrary to Blue Global’s representations, the company provided consumers’ sensitive information—including SSN and bank account number—to buyers without consumers’ knowledge or consent. The FTC further alleged that, upon receiving complaints from consumers that their personal information was being misused, Blue Global failed to investigate or take action to prevent harm to consumers. Continue Reading Lead Generation Business Settles FTC Charges That It Unlawfully Sold Consumer Data