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Regulators, like prosecutors, are increasingly turning to independent monitors as a means of moving non-compliant entities into compliance. It appears certain that the appointment of independent monitors to enforce compliance with cybersecurity regulations will become common. Several financial industry regulators are moving to establish cybersecurity standards with which financial institutions will have to comply just as they do with money laundering and other regulations.
Financial institutions and other regulated entities are commonly subject to the imposition of a monitor by state and federal regulators to address a wide range of misconduct. Having inadequate controls to detect and prevent money laundering is a prime example. With so much at risk from intrusions into financial industry systems, and indeed all data-intensive networks such as the health care industry, the imposition of an independent monitor to move the entity into compliance can only be accepted as the coming norm.
Thus, it may become most prudent to add a cyber monitor to your incident response team. We all recognize the need for counsel, the forensic investigators, internal IT, and perhaps a public relations firm, but the cyber monitor just might become an essential component as well. As the incident investigation unfolds, the forensic investigator and internal IT work to find out what happened and counsel evaluates the resulting legal consequences and obligations. But in anticipation of the looming response of the regulators, the cyber monitor begins at as early a stage as possible to identify and repair lapses in compliance. Using the recently issued Yates Memorandum by the U.S. Department of Justice as an example, the steps an entity takes on its own to identify and remedy misconduct and regulatory violations can go a long way to minimizing the sanctions imposed by a regulator.
The difference between a computer security company and a cyber monitor is important. The former is a technical expert in cyber forensics, networks and penetration testing. The monitor possesses a very different set of expertise, upon which we will comment in our next installment.
Kenneth C. Citarella is senior managing director for the Investigations and Cyber Forensics practice at Guidepost Solutions LLC. He has more than 30 years of experience investigating and prosecuting white collar crime and computer crime.“