The cybercrime group known as Scattered Spider is at it again, according to Google’s Threat Intelligence Group. This criminal group is known to focus its cyber attacks on one sector at a time. Last spring, it was the retail industry; more recently, the insurance industry has been hit.
Members of Scattered Spider typically impersonate a company employee over email or in phone calls, especially members of the company’s information technology team. They trick employees into compromising the company’s network security, and then the criminals steal data, deploy ransomware, and execute fraud and extortion schemes.
These tactics pose a significant legal threat for companies that hold vast amounts of personal and financial information. Responding effectively to such incidents requires more than technical mitigation; it also involves navigating a complex landscape of legal obligations and regulatory scrutiny. Understanding the legal and compliance challenges involved is an important part of any comprehensive incident response strategy. This should include:
Planning
- Before an incident occurs, engage legal counsel to help make sure your cyber incident response plan (you have one, right?) includes legally compliant steps for how to handle a ransomware event, extortion, or a socially engineered attack.
- Prepare a coordinated response to ensure timely notification under applicable state, federal, and international data breach and privacy laws like the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act (HIPAA), and the European Union’s General Data Protection Regulation (GDPR).
Protection—Inside and Out
- Involving legal counsel early helps protect sensitive communications and forensic findings under attorney-client privilege, reducing the risk of unwanted disclosure in litigation or regulatory reviews.
- Savvy attorneys can also guide appropriate communication with regulators, law enforcement, and other key stakeholders to ensure accurate, legally sound responses throughout the process.
Knowledge
- Make sure you know and are following the applicable regulatory compliance and reporting requirements such as the Securities and Exchange Commission’s cybersecurity incident disclosure rules for publicly traded companies, the Federal Trade Commission Safeguards Rule for handling customer data, and State Attorneys General as required.
- Retain and manage forensic experts to work through any potential incident. Legal privilege is a necessary asset during coordination with forensic teams.
Risk Management in Policy
- Assist in drafting and reviewing cyber insurance policies to address social engineering coverage, any exceptions to coverage, and clarity on ransom payments, cryptocurrency, and business interruption losses.
- Evaluate insurance coverage rights and reporting obligations .
Vendor and Supply Chain Risk
- Draft and enforce vendor due diligence and cybersecurity clauses in third-party contracts. While you may have protections in place, do your vendors and suppliers have the same standards?
- Help assess legal exposure from any downstream vendors who may introduce cyber risk.
Education
- Help develop legal risk management webinars, workshops, and other training for employees. Make sure they understand your incident response plan.
- Address the legal aspects of vulnerabilities exploited by bad actors.
Contacts and Payments
- Be prepared to manage contacts with law enforcement and regulators in the wake of an incident.
- Evaluate the legality of paying a ransom and coordinate the due diligence checks to ensure payments will not create additional legal exposure, such as payments to terror groups and other sanctioned entities.
The bottom line is that navigating the tangled web of cyber threats—especially those posed by groups like Scattered Spider—requires more than reactive measures. It demands a well-thought-out plan and a trusted team prepared to respond from every angle: technical, operational, regulatory, and legal. Heading into that uncertainty without coordinated support can lead to costly missteps. Make sure your organization has the right structure, the right strategies, and the right people in place before an attack occurs.
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