Professional Liability Blog

It seems like we can’t go a week without hearing about a cybersecurity breach at a major US corporation. Corporate boards need to be aware that improper oversight of cybersecurity issues could lead to a shareholder derivative lawsuit. One such example from within the last couple of years is Palkon v. Holmes, 2014 WL 5341880, at *1 (D.N.J. Oct. 20, 2014) (No. 2:14-CV-01234 SRC). Palkon involved the global hotel operator Wyndham, which between April 2008 and January 2010 was subject to three cyber-attacks, each resulting in a loss of customer data.

On a list of jobs likely to engender little sympathy in the United States today, chief executive officer (CEO) perhaps is up there with trial lawyers and Internal Revenue Service auditors in the category of “most reviled.” Nonetheless, this blog entry offers a primer for CEOs on how to more effectively watch their backs and keep their jobs (or at least how to more effectively sue after losing them).