Privacy and cybersecurity issues continue to garner significant attention in the U.S. and abroad. As private investment funds registered with the SEC and their portfolio companies see increased regulatory scrutiny relating to privacy and cybersecurity in the U.S., Proskauer’s Margaret Dale, Todd Ohlms, Jonathan Weiss, Kelly McMullon and Hena Vora

In 2020, we saw an increased regulatory focus on cybersecurity. Though former SEC Chairman Clayton largely took the view that existing statutes and regulations were sufficient, the Division of Examinations increased exam activities in the space while agencies like FinCEN increased enforcement against violators. We can expect to see a continued focus on cybersecurity going forward as a persistent long-term trend, but it is unclear whether it will remain among the top priorities of the SEC this year. As discussed in Risk #1, we believe that the Chairman, Gary Gensler, will take a more active approach generally and, as part of that, we expect a heightened focus on cybersecurity. Sponsors are a theoretically high value target for attack because even relatively small sponsors often control billions of dollars (whether directly or indirectly) and have highly confidential information concerning their investors and partners. It is important that sponsors’ commitment to, and investment in, cybersecurity systems, policies, and procedures is commensurate with their risks and profile in fact.