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FMG Law Blog Line

Posts Tagged ‘privacy laws’

“Senior Safe Act” Encourages Reporting of Senior Investor Fraud

Posted on: May 25th, 2018

By: Ted Peters

On May 22, 2018, the Senior Safe Act, authored by U.S. Senators Susan Collins (R-ME) and Claire McCaskill (D-MO), passed in the House of Representatives as part of a bipartisan banking reform package after previously being passed by the Senate (67-31) in March.  The Act seeks to curb financial exploitation of senior investors by establishing a safe harbor in which advisors and their firms can report abuses without fear of liability for violation of privacy laws.

The Act extends legal immunity to banks, credit unions, investment advisors, broker-dealers, insurance companies and insurance agencies for reporting suspected exploitation or fraud, provided that they have established controls and procedures that will help employees and advisors identify and report suspected abuses, and provided further that they make the report in good faith and with reasonable care.

The Act has been broadly endorsed by the securities industry and has received bipartisan support.  Says FSI (Financial Services Institute) President and CEO, Dale Brown, “We applaud the House for taking a significant step toward the prevention of elder financial abuse by passing the Senior Safe Act… Financial advisors and financial firms are often the first to detect possible financial abuse, so it is critical that they have proper training to identify potential abuse as well as the ability to report it without fear of violating privacy laws.”

President Trump is expected to sign the Act into law as he tweeted that he would do so.

If you have questions or would like more information, please contact Ted Peters at [email protected].

Countries Around the World Are Investigating Facebook’s Cambridge Analytica Event

Posted on: April 26th, 2018

By: Allen E. Sattler

On March 18, 2018, news broke of the Cambridge Analytica event where the data of an estimated 87 million Facebook users was disclosed to the UK-based political consulting firm.  The breach of user data resulted in several U.S. investigations, including by Congress and by the Federal Trade Commission (“FTC”).  Facebook entered into a consent decree with the FTC in 2011, where Facebook agreed to never make deceptive claims concerning users’ privacy and to obtain users’ informed consent before changing the way in which it shares their data.  The FTC is investigating whether Facebook violated the terms of this agreement which carries a possible $40,000 per-violation fine.

On April 10 and 11, Mark Zuckerberg appeared before Congress where he testified that Facebook failed to protect its users’ data and that Facebook “didn’t take a broad enough view” of its responsibility in ensuring the privacy of its users following its initial discovery of the Cambridge Analytica event.  He also accepted personal responsibility for the matter as the company’s founder and CEO.

What might have been lost in the flurry of domestic activity is the amount of scrutiny Facebook is receiving by nations around the globe.  This breach involved users from many countries, with over 1 million affected users in each of four different countries.

The European Union launched an investigation into Facebook on March 19, and the United Kingdom and Australia quickly followed.  Under Australian privacy laws, the government has the authority to issue fines against Facebook of up to $1.6 million if it determines that Facebook violated those laws.

Countries of southeast Asia soon followed with investigations of their own.  Indonesia, which is home to over 115 million Facebook users, 1 million of whom were affected by this breach, launched an investigation on April 6.  Under Indonesian law, the government can assess fines against Facebook representatives personally of up to $870,000.  Singapore has opened an investigation as well, where it has already questioned Facebook executives located in their country.

The Philippines announced its investigation into Facebook on April 13.  The county was rated as the biggest user of social media several years running.  Research indicates that Filipinos spend almost four hours per day on various social media platforms.   This breach affected nearly 1.2 million Filipinos, and news reports indicate that Cambridge Analytica might have helped President Rodrigo Duterte in his successful 2016 campaign.  The event therefore has enormous significance to Filipinos.

On Friday, April 20th, Germany became the latest country to open an official investigation into the Facebook.  Germany’s data privacy regulator said fines could be levied against Facebook in the amount of 300,000 euros ($366,000).

Facebook had revenues of more than $40 billion last year, so the fines that each country might assess against the company seem relatively insignificant.  The investigations launched against Facebook can nevertheless have a big impact on the company and on the entire industry.  This event has garnered the attention of countries around the world, and it has already led to a greater awareness of privacy concerns that exist on social media platforms.

If you have any questions or would like more information, please contact Allen Sattler at [email protected].