Tag Archives: Eric McLaughlin

The FTC Moves Toward a Rules-Based Approach to Cybersecurity Regulation for Financial Institutions

by Avi Gesser, Kelsey Clark, Jennifer E. Kerslake, and Eric McLaughlin

In our first Cyber Blog post, we predicted that the rules-based approach adopted by the NYDFS would become the model for cybersecurity regulation.  Two years later, we’re feeling pretty good about that prediction, as the FTC recently proposed incorporating a number of aspects of the NYDFS cybersecurity rules into its Standards for Safeguarding Customer Information rule (the “Safeguards Rule”).  The proposal would also expand the Safeguards Rule’s definition of “financial institution” to include “finders,” or companies that connect potential parties to a transaction.  As a reminder, the Safeguards Rule applies to financial institutions that are not regulated by the federal banking agencies, the SEC, or state insurance authorities, including non-bank mortgage lenders, payday lenders, finance companies, check cashers, money transmitters, collection firms, and tax preparers. Continue reading

Alternative Data Goes Mainstream, and Gets Increased Attention from Regulators

by Avi Gesser, Eric McLaughlin, Clara Y. Kim, and Sumeet Sanjeev Shroff

In the last few years, we have seen a dramatic increase in the purchase and sale of alternative data—a shorthand for big data sets, such as satellite images of parking lots, drug approvals, credit card purchases, cellphone data on retail foot traffic, and construction permits. According to alternativedata.org, the alternative data industry is projected to be worth $350 million in 2020. The recent announcement by Bloomberg LP that it is offering a product that will give clients access to large volumes of alternative data shows the widespread use of this information in making investment decisions, which is causing hedge fund managers and institutional investors to seek even more untapped alpha-generating data sets.  Not surprisingly, all this activity is attracting increased regulatory scrutiny. Continue reading