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Aug 20 2009   6:09PM GMT

Amended Massachusetts data protection act focuses on risk management



Posted by: Sarah Cortes
Federal Trade Commission, risk management, Information security, consumer protection, Security, Gramm-Leach-Bliley Act, FTC, 201 CMR 17.00, Massachusetts’ Data Privacy Law, privacy, data protection, regulation, compiance, IT compliance

As Alexander Howard reported earlier today, the Massachusetts data protection law has been amended. The revised data privacy regulations — 201 CMR 17.00, “Standards for the Protection of Personal Information of Residents of the Commonwealth” — include several key updates. If you are an information security professional, take note of these changes, as they will likely have practical implications.

The most immediate impact is the provision for an additional 60 days to comply with the regulations. The deadline for implementation is now March 1, 2010.

Individuals and municipalities have expressly been removed from guideline jurisdiction, with a clarification that the “regulation applies to those engaged in commerce.” Guidelines on the requirement for a written information security plan are now simplified.

A new definition for the term service provider was added. The Office of Consumer Affairs and Business Regulation also amended third-party vendor rules. There is now a two-year grace period, relative to existing contracts, and requirements for those third parties to be in compliance.

Encryption requirements have been clarified. The apparently strict but, practically speaking, vague 128-bit specification from the prior version was replaced by “technology-neutral language.”

Further, a “technical feasibility” standard has been incorporated, acknowledging that methods to securely encrypt data on portable devices may not yet be available. Email encryption now falls under the technical feasibility standard. Additionally, encryption of backup tapes has been clarified to include prospective encryption. So you may safely cancel your firm’s plans to encrypt existing backup tapes. Encrypting new backup tapes will still be required, along with any personal data that travels over the public Internet or wireless network.

In another change that I believe will ultimately enhance consumer protection, 201 CMR 17.00 has been brought in line with certain federal regulations. Specifically, the Massachusetts data protection act now cedes authority to the Federal Trade Commission’s (FTC) standards established under the Gramm-Leach Bliley Act (GLBA). GLBA utilizes a risk management approach to data security.

The patchwork of 44 different state health data protection laws has delayed electronic automation of, and therefore overall security for, health records. Adopting a federal standard, starting with the FTC’s risk-based approach to data protection, avoids this pitfall and may make widespread compliance both more feasible and more likely in the near future.

On one hand, a risk management approach should be familiar to IT professionals. It shifts resources from “check-the-box” controls that may or may not address a particular organization’s specific risks to controls that make more sense in context. On the other hand, given the concrete definition of the personal information in scope, it is difficult to see where risk management would not be present whenever such personal data is stored.

“Mandating every component of a program and requiring its adoption, regardless of size and the nature of the business and the amount of information that requires security, makes little sense in terms of consumer protection,” said Bradley MacDougall, of Associated Industries of Massachusetts. Risk management and assessment will afford more consumer protection by matching a given business’ actual risks with required security investments.

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Jul 20 2009   7:26PM GMT

Managing e-discovery and compliance: What would Eliot Spitzer do?



Posted by: Sarah Cortes
e-discovery, Audit, regulation, Massachusetts, privacy, Security, compliance, high-risk data, Technology, Putnam, Putnam Investments, market timing, Project management, Eliot Spitzer, business

E-discovery - or electronic discovery - has many technical aspects. Questions of available tools, case law, regulations and scope are critical. One of the most important and often overlooked elements, however, is managing e-discovery and compliance.

As a senior manager at Putnam Investments, bizarre coincidences and convergence of fate with the soon-to-be famous marked my tenure. Few chapters embodied all these elements as thoroughly as the following e-discovery anecdote, for reasons that are obvious now, but were less so in 2003.

On Monday, Nov. 3, 2003, Putnam Investments fired its CEO, Larry Lasser, following a probe into market timing. Eliot Spitzer, New York’s attorney general, and William Galvin, the Massachusetts state regulator, had brought significant pressure to bear regarding market timing charges.

Spitzer, then known best as U.S. Attorney for the Southern District of New York, issued a subpoena two weeks later for Putnam documents. In the process, he indicated that criminal charges were being considered. From that day onward, senior managers at Putnam had a critical new IT project: managing e-discovery and compliance.

Unlike other IT projects, which include a feasibility analysis, budgeting and decision-making process prior to kickoff, e-discovery really starts from subpoena receipt. Spitzer’s reputation for a “take-no-prisoners” approach to investigations and prosecutions, not atypical for situations many firms face during litigation, had implications for IT.

From the moment a subpoena is received, senior technology managers should be called in. From IT’s viewpoint, e-discovery then becomes a new IT project on the list that requires reprioritization of existing resources.

The first step in managing e-discovery is to assign an IT project manager. Given that this will be a high-risk project, a seasoned individual is required. That means either hiring a backfill candidate for an existing project, or cancellation or delay of exiting work. E-discovery is usually a good example of a project that has no real, measurable ROI. This is a handy data point for all those IT projects that you, the IT manager, have to argue for each year during the budgeting process. That process demands an ROI even for operating system, database and other major software upgrades, which are also projects that evade calculating an ROI.

The next step in managing e-discovery is stakeholder and requirements identification. While vendor or tool selection usually comes later in the process, for a specialized project like e-discovery, identifying requirements should be fast-tracked from Day One. Firms and experts specializing in e-discovery are crucial for this type of project, which typically will be handled only once in a company’s lifetime – you’re lucky. Your staff is likely to lack experience with e-discovery, a reality best addressed by selecting an advisor immediately after selecting a project manager.

In the next post, I will address how to adapt standard project management techniques to the e-discovery project.

Questions? Write to editor@searchcompliance.com or reply to @SecuritySources on Twitter.

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