David Sun, a cybersecurity expert with 25 years of experience at CohnReznick, and Annmarie Giblin, a partner at Norton Rose Fulbright specializing in cybersecurity law, discuss the alarming evolution of ransomware attacks. They highlight legal requirements for incident reporting and the importance of proactive cybersecurity measures like multi-factor authentication. The conversation also delves into the intricacies of cyber insurance, exploring coverage options and limitations. Ultimately, they emphasize rigorous training and a well-crafted incident response plan for family offices.
Ransomware has evolved to not only encrypt data but also exfiltrate sensitive information, highlighting the importance of comprehensive cybersecurity measures for family offices.
Family offices face unique cybersecurity threats due to a lack of awareness and reliance on IT personnel without specialized cybersecurity expertise, necessitating robust security practices.
Navigating legal repercussions after a ransomware attack requires early engagement with legal counsel to ensure compliance with evolving data privacy regulations and manage potential liabilities.
Deep dives
Understanding Ransomware and Its Evolution
Ransomware is malicious software that encrypts a victim's files, making data inaccessible until a ransom is paid, often in cryptocurrency. It has evolved due to improved IT defenses, with attackers now exfiltrating sensitive data before encryption, exploiting the risk of leaked information to compel victims to pay. In the family office sector, awareness of ransomware's prevalence is crucial, as no organization is immune to such attacks. This growth in sophistication means that simply restoring backups may no longer suffice; organizations must also guard against data exposure risks.
Risks Unique to Family Offices
Family offices face unique cybersecurity risks, including a lack of awareness that makes them attractive targets. The misconception that smaller organizations are not appealing to attackers can lead to inadequate defenses, as ransomware attacks operate automatically and indiscriminately across the internet. Additionally, reliance on IT personnel without cybersecurity expertise can be problematic, emphasizing the need for distinct security measures. Family offices must implement robust security practices and be aware of the critical role that IT plays in safeguarding against cyber threats.
Legal Implications of Ransomware Attacks
Family offices that experience a ransomware incident must navigate complex legal repercussions, including regulatory notifications and liability for breaches involving personal data. The risks associated with data breaches can be compounded by the personal and sensitive information typically held by these organizations, leading to potential liability and litigation. Engaging legal counsel early in an incident can help manage these complications and ensure compliance with reporting obligations. As data privacy regulations evolve, being proactive is essential to mitigate legal risks and maintain accountability.
Business Email Compromise: A Growing Threat
Business email compromise (BEC) is a prevalent threat that presents serious financial risks, often leading to significant losses due to fraudulent wire transfers. Attackers can compromise email accounts and manipulate communications to orchestrate financial scams, leveraging trust within an organization to their advantage. With insights gained from access to compromised emails, attackers can cleverly orchestrate further social engineering attacks. Therefore, family offices must acknowledge and actively defend against BEC, as it often poses a greater immediate threat than ransomware.
Preventative Measures for Cybersecurity
To enhance cybersecurity, family offices should adopt proactive measures such as implementing advanced endpoint detection and response (EDR) software, multi-factor authentication (MFA), and regular security awareness training for all staff members. These strategies can help mitigate risks and ensure that organizational members recognize suspicious activities promptly. Segmentation of critical systems and careful control of remote access further strengthen defenses against potential attacks. Overall, a comprehensive cybersecurity culture and robust technical measures are essential for protecting sensitive information within family office environments.
This is a special episode in the tax track for the Larry Kraus Institute’s family office community. It is a recording of a virtual program presented on June 26th titled: Ransomware: What Family Offices Need To Know, If And When Data Is Compromised.
The moderator was Tony Gebely, CEO of Annapurna Cybersecurity Advisors. The panelists were David Sun who leads the cybersecurity incident response and computer forensic services for CohnReznick and Annmarie Giblin, Partner in the Global Cybersecurity and Privacy Group at Norton Rose Fulbright.
The video from this program can now be viewed on www.myfotech.net
The FOTechHub podcast is a collaboration with Phil Strassler's Larry Kraus Family Office Tax & Tech-NEW-Logy institute.
If you like this discussion please follow us or join our network through fotechhub.com to be invited to future virtual and in-person events.
00:05 - Introductions 06:05 - Evolution of ransomware attacks, from encrypting systems to data exfiltration 13:11 - Legal implications and requirements, notifying authorities and regulatory scrutiny 27:39 - 27:39 - Cybersecurity measures and proactive approach: EDR (endpoint detection response), MFA (multi-factor authentication), testing, analysis, monitoring and training 52:28 - Cyber insurance and ransomware coverage, different types of insurance, limitations
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