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U.S and EU cyber regulatory compliance is a legal and compliance issue and in-house counsel plays an important role in supporting their organizations walk through the mine field of regulatory compliance. As regulatory compliance to cyber regulations such as the SEC final rule, pushes cyber into the board room, becomes a focus for state regulators and the role of the reasonable investor is questioned.
The corporate focus on cyber will require in house counsels involvement in the definition of ‘materiality’, ‘reasonableness’, ‘adequate’ compliance and the ‘duty of care’, required to demonstrate to regulators covered entities can manage material cyber risks and report material cyber incidents. That we discussed earlier this year (https://lnkd.in/e8u6mj4a)
In house counsel will also have to focus on the public ‘fall-out’ when reporting a cyber attack; the potential for increased civil actions and the issues that regulatory compliance will create for cyber and D&O insurance.
“While the SEC can’t dictate Delaware state law to Delaware directors, one could imagine a scenario where the Delaware courts would say, ‘Well, if the SEC is asking you to disclose this, what do you mean you don’t have a system for monitoring cybersecurity risks?’ – Greg Varallo of Bernstein Litowitz Berger & Grossmann LLP
Challenging times ahead for covered inhouse counsel, as cyber regulation develops and legal cyber skills are at a premium.
Rachel V. Rose, JD, MBA Ted Dziekanowski Brian D. McCarthy Bob Dix
#theagustagroup #cybersecurity #cyberriskmanagement
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