Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
Futures broker AMP Global Clearing LLC settled Commodity Futures Trading Commission charges that its failure to diligently supervise a cybersecurity vendor resulted in a data breach.
The CFTC enforcement action is another example of “a long-standing theme among financial regulators about the critical need for financial institutions to oversee third parties with whom they do business,” Nathan Taylor, a cybersecurity and financial services partner at Morrison Foerster LLP in Washington, told Bloomberg Law.
As a registered futures commission merchant, AMP is obligated to diligently supervise its employees and agents in the security of its information systems, among other activities, according to the Feb. 12 settlement order. Under the agreement, AMP will pay a $100,000 civil penalty and cease and desist from violating CFTC regulations on diligent supervision of information systems. AMP didn’t admit liability under the pact.
AMP failed to adequately supervise an information technology vendor’s implementation of Information Systems Security Program (ISSP) provisions required by CFTC regulations, according to the order. The vendor was tasked with making risk assessments of access routes through AMP’s computer networks and maintaining strict firewalls.
But according to the CFTC, AMP left customer records vulnerable for 10 months until an unnamed third party discovered the vulnerability and made a copy of 97,000 customer files. The third party sent the copied data to federal authorities so they could ensure it was protected, and then alerted AMP.
Cybersecurity is “an area of increasing concern and scrutiny for the CFTC as it goes directly to the core principles of a registered entity, namely to have adequate system safeguards,” Anne Termine, of counsel in the futures and derivatives practice at Covington & Burling LLP in Washington, told Bloomberg Law.
Cybersecurity is a hot topic at CFTC, Termine said. The agency may conduct an enforcement sweep with coordinated investigations of registrants as a way to ensure the registrants are meeting its expectations, she said.
To contact the editor responsible for this story: Donald Aplin at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)