October 22, 2011 - In handing down its decision yesterday in Wayne Crookes and West Coast Title Search Ltd. v. Jon Newton, the Supreme Court of Canada struck an important blow for certainty as far as Canadian internet publishers and users are concerned. The case, appealed from the British Columbia Court of Appeal, concerned a website operated by Newton. An article he posted on it contained hyperlinks to other websites, which in turn contained information about Crookes. Crookes sued Newton alleging that two of the hyperlinks connected to defamatory material, and that by using the hyperlinks, Newton was himself “publishing” the defamatory material. Read more...
Following the publication of our original post on the implications of a cyber attack on investors’ securities portfolios (see here), we have been asked by scores of readers whether securities fraud litigation arising from cyber crime has ensued. Not surprisingly, the answer is “yes.”
Indeed, we have located at least two such cases, one a putative securities fraud class action against a payment processing company and the second an SEC initiated action against a private investor. The results may (or may not) surprise you, depending on your perspective of trial courts’ levels of judicial activism and willingness to render substantive decisions at early stages of litigation.
In re: Heartland Payment Systems, No. 09-1043 (D.N.J. Dec. 07, 2009) remains the paradigm for such litigation. To facilitate its payment processing services, Heartland Payment Systems (“Heartland”) stored millions of credit and debit card numbers on its internal computer network. In December 2007, hackers launched a Structured Query Language Attack (“SQL attack”) on Heartland’s payroll management system. To its credit, Heartland was able to successfully avert the attack before any personally identifiable information was stolen. At the same time, however, the company failed to detect malicious software (“malware”) which had been placed on the network by the SQL attack. The malware infected Heartland’s payment processing system, ultimately enabling the hackers to steal 130 million consumer credit and debit card numbers. Heartland did not discover the breach until January 2009, at which time it notified government authorities and publicly disclosed the event. Over the course of the following month, Heartland’s stock price dropped over $15 per share. Perhaps not surprisingly, shareholder class actions ensued.
In their complaint, plaintiffs alleged that Heartland and its officers and directors had made material misrepresentations and omissions about the December 2007 SQL attack. Specifically, plaintiffs claimed that the defendants concealed the SQL attack and misrepresented the general state of Heartland’s data security. Plaintiffs further alleged that the defendants’ conduct was fraudulent because they were aware that Heartland’s network had been breached, yet they had not fully remedied the problem Read the rest of this entry »
I am proud to be a Co-Chair of the 2nd Annual NetDiligence Cyber Risk & Privacy Liability Forum which will take place June 9-10, 2011, at the historic Philadelphia Union League. Last year’s program was a huge success and the program planners are expecting the turnout to be even bigger this year.
NetDiligence and HB Conferences have teamed up to pull together thought leaders in the cyber/privacy industry to address the most urgent subjects. The program is fully accredited for continuing education and is priced at a level firms and companies will find attractive.
Over the course of a day an a half, we will present 45 industry-leading experts. I will help moderate the Conference, together with my Co-Chairs, Oliver Brew of Hiscox USA, Toby Merrill of ACE Professional Risk and Meredith Schnur of Wells Fargo Insurance Services USA. Also featured will be a keynote address by Jeffrey L. Seglin, nationally syndicated columnist of The Right Thing and author of The Right Thing: Conscience, Profit and Personal Responsibility in Today’s Business.
Posted April 16th, 2011 by Daisy KhambattacloseAuthor: Daisy KhambattaName: Daisy Khambatta Email: dkhambatta@cozen.com Site:http://www.cozen.com/attorney_detail.asp?d=1&atid=1265 About: Daisy Khambatta is an associate in Cozen O’Connor’s Chicago office and a member of the Global Insurance Group. Daisy focuses on representing client’s in all aspects of the insurance and reinsurance business, including claims counseling, litigation and arbitration, regulatory issues and government relations, and formation of captive insurers and risk retention groups. Her practice includes the handling of issues involving commercial, primary, umbrella, excess and surplus lines, and reinsurance.
Daisy devotes a substantial portion of her practice to defending companies against toxic tort claims. Currently, she serves as national coordinating counsel for a manufacturer of heat processing equipment involved in asbestos lawsuits. Her experience includes implementing the defense strategy and overseeing the handling of lawsuits through all phases of litigation. She has represented a wide range of companies against various types of mass tort claims, including asbestos, silica, benzene, and coal workers pneumoconiosis suits throughout Illinois and the state of Texas.
Daisy was named by Law & Politics Magazine as an Illinois Super Lawyers’ Rising Star 2010 in the area of Insurance Coverage. Daisy earned her law degree from South Texas College of law and her bachelor's degree from the University of Texas at Austin.
Publications & Speeches:
• Co-author, “Reforming the Asbestos Question: State Ventures Where Congress Fears to Tread,” ABA Litigation Mass Tort Newsletter, Fall/Winter 2005.
• Co-uuthor, “Illinois Nationwide Litigation Post-Avery: Are Times Really Changing,” ABA Litigation Mass Tort Newsletter, Spring/Summer 2006.See Authors Posts (2)
Cyber crime is costing the United Kingdom more than £27 billion a year ($43.5 million), according to a recent study published by Britain’s Office of Cyber Security and Information Assurance. The report, entitled “The Cost of Cyber Crime,” concluded that digital crime was a widespread, pervasive threat to U.K. businesses.
Theft of intellectual property, such as designs, formulas and other company secrets from businesses costs £9.2 billion, with firms specializing in pharmaceuticals, biotechnology, electronics, IT and chemicals being hit hardest. The pharmaceutical industry loses about £1.8 billion a year in IP theft, followed by electronics and electrical equipment makers and the software sector. In terms of non-IP industrial espionage, financial services are the biggest loser, with yearly losses of more than 2 billion, followed by mining and aerospace.
Following the publication of our original post on the implications of a cyber attack on investors’ securities portfolios (see here), we have been asked by scores of readers whether securities fraud litigation arising from cyber crime has ensued. Not surprisingly, the answer is “yes.” 
