Hungry, Hungry HIPAA

HIPAA compliance

One recent case that didn’t get much attention, but should have, clarifies Ohio health care providers’ potential exposure for the unauthorized disclosure of patient health information (“PHI”).  On August 14, 2015, the Second District Court of Appeals decided Sheldon v. Kettering Health Network. [i]   In Sheldon, the Second District addressed patients’ rights related to the unauthorized disclosure of PHI.  Although the plaintiff was ultimately unsuccessful, the court affirmatively held that the Health Information Portability and Accountability Act (“HIPAA”) does not prevent a patient for asserting a common law tort claim for unauthorized disclosure of medical information.  On February 10, 2016, the Ohio Supreme Court declined to review the correctness of the Second District’s decision.  At that point, Sheldon effectively removed more than fifteen (15) years of gray area on the matter.[ii]

Prior to Sheldon, the Ohio Supreme Court decided Biddle v. Warren Gen. Hosp.[iii]  In Biddle, the Court held that, in Ohio, a physician can be held liable under Ohio common law for unauthorized disclosures of medical information.  The cause of the “gray area” was that the Supreme Court decided Biddle before HIPAA’s privacy-rule regulations were published on December 28, 2000 and before its security-rule regulations took effect on April 21, 2003.[iv]   The Sheldon case provides considerable clarity on exactly how HIPAA and the HITECH Act coexist with Ohio common law tort claims.

One point verified by Sheldon is that, according to Ohio law,  HIPAA does not allow a private cause of action.[v]  However, the Second District then concluded that HIPAA does not preempt an Ohio state law claim for the independent tort recognized by the Ohio Supreme Court in Biddle:

“[T]he unauthorized, unprivileged disclosure to a third party of nonpublic medical information that a physician or hospital has learned within a physician-patient relationship.”

The Second District went on the refer to such actions as “Biddle claims.”   The Second District went a step further in addressing how the standards delineated in the HIPAA regulations interact with Biddle claims.

The Second District held that violation of HIPAA does not provide for negligence per se claims.  The Court reasoned that to allow such a claim would essentially override HIPAA’s explicit prohibition of private causes of action.[vi]   However, buried in the Sheldon decision is one sentence that should send a shiver down the spines of physicians and the attorneys who represent them:

“[T]he violation of an administrative rule does not constitute negligence per se; however such a violation may be admissible as evidence of negligence.”[vii]

Essentially, HIPAA may not allow for a private cause of action, but according to Sheldon, a health care provider’s HIPAA dirty laundry can still be heard by a jury in conjunction with a Biddle claim.

More troubling is that recent Federal case law, although only persuasive authority for Ohio state claims, will make it much easier to get these types of cases to a jury.

In  July 2015, the Federal Seventh Circuit Court of Appeals decided Remijas v. Nieman Marcus Group, LLC[viii]a case involving a massive data breach.  The Seventh Circuit overruled the trial court’s ruling in holding that “injuries [of customers] associated with resolving fraudulent charges and protecting oneself against future identity theft do” provide sufficient standing to maintain a cause of action for those affected by a data breach.[ix]  Thus, in situations where a data breach has occurred, but no actual identity theft has occurred, Remijas establishes the framework for plaintiffs’ lawyers to overcome the heretofore solid defense of lack of standing due to intangible and speculative damages.   Although no Ohio court has applied the reasoning of Remijas, there is now a viable legal argument to be made in Ohio state law negligence claims.

With the spate of data breaches in the health care industry occurring around the country (including several in the state of Ohio), HIPAA covered entities must take action to ensure that information security processes and procedures are in place. Not only because the impending threat of litigation or the fact that the Department of Heath and Human Services has announced that 200 new HIPAA audits are in the pipeline for 2016.[x]  It is simply the right thing to do.  Perhaps the Hippocratic oath, in our digital age, should extend to patients’ identity as well as their health and wellness.

Ickes Holt is a full-service, team-driven, and client focused law firm in Northeast Ohio concentrating on information security and governance. Information is the DNA of modern organizations and Ickes Holt is dedicated to advising clients on how to protect its information. Please contact us to discuss establishing or improving the information governance policies for your organization.


[i] Sheldon v. Kettering Health Network, 40 N.E.3d 661(App. 2d Dist. 2015)

[iii] Biddle v. Warren Gen. Hosp. , 86 Ohio St.3d 395, 401,1999-Ohio-115, 715 N.E.2d 518 (1999)

[iv]Sheldon at 671

[v] Id. at 670 citing Henry v. Ohio Victims of Crime Comp. Program, S.D.Ohio No. 2:07-cv-0052, 2007 WL 682427 (Feb. 28, 2007)

[vi] Id. at 674

[vii]Id. citing Chambers v. St. Mary’s School, 82 Ohio St.3d 563, 1998-Ohio-184, 697 N.E.2d 198 (1998)

[viii] Remijas v. Neiman Marcus Group, LLC, 794 F3d 688 (7th Cir. 2015)

[ix] Id.

[x] Raths, David, OCR’s Samuels Describes Launch of Phase 2 of HIPAA Audit Program, Health Care Infomatics, March 19, 2016

Information Security and Privacy Round-Up: Memphis Neurology & Fazio Mechanical

identity theft in memphis

Information security and privacy is an incredibly broad and pervasive topic.  It spans across industries, relates to private and public sectors, affects small business to publicly traded companies, is governed by federal and state legislation, is enforced by regulators and courts, and incorporates IT and legal solutions.  Information is the DNA of the modern world.  It is everywhere – our computers, our phones, our cars, our homes, our businesses, the cloud.  We have unprecedented access to each other, and as a result, other people have unprecedented access to our information. The boundaries of information security are continually being stretched by the dramatic leaps in technology and ever shifting societal norms.

Events in the information security realm occur so quickly that it is difficult, even for privacy professionals, to keep current.  This article will provide an overview of some recent information security cases, both which illustrate the concept that small to mid-sized business are the most vulnerable to, and least equipped to prevent, information security attacks.

Memphis Neurology Case:  In February, the U.S. Attorneys’ office indicted Jeremy Jones on charges of identity theft, fraud, and conspiracy.  Jones is accused of conspiring to steal the identities of more that 145 patients of Memphis Neurology, as well as customers of car dealerships and other people he knew.  Jones used the stolen identities to apply for loans and credit cards, and to open banks accounts in the victims’ names.   The estimated loss to the defrauded financial institutions is $1,660,587.30.

The Memphis Neurology case presents significant information security concerns, namely, insider threats and access controls.  Memphis Neurology is a regional, private neurological practice with five locations.[i]  The practice has been in business since the 1970’s.  Jones allegedly conspired with an employee of Memphis Neurology to steal patient information from the practice’s database.[ii]   The scheme allegedly began in 2011 and continued through 2015.[iii]

This case underscores the importance of: (1) training employees about information security: (2) clearly communicating to employees the consequences for intentional and unintentional security breaches; (3) properly screening potential employees during the hiring process; (4) conducting periodic audits of information security practices for efficacy and potential breaches; and (5) ensuring access to patient information is properly limited to authorized employees, including organizational and physical security.  These items are crucial components to an overall information security governance program, which is required by HIPAA and the FTC Act, as well as necessitated by the modern world in which small to mid-sized medical practices operate.

Jeremy Jones is facing criminal charges.  The financial institutions are facing the loss of $1,660,587.30.  But, what about Memphis Neurology?  What are the potential consequences to the practice?  First, they almost certainly lost existing and future customers.  Second, they face potential investigation and enforcement by the Federal Trade Commission and/or the Department of Health and Human Services.  An investigation and enforcement action will cost Memphis Neurology significantly in legal fees and lost productivity.  Further, the FTC and HHS are not averse to levying heavy financial penalties for violations.  Finally, while neither the FTC Act or HIPAA provide a private right of action, there is an increasing trend of state courts adopting federal statutory/regulatory frameworks as the “standard of care” in common law negligence actions.[iv]  This trend could expose Memphis Neurology to state court negligence lawsuits brought by the patient victims.

Target Breach-Fazio Mechanical.  Most people are aware of the Target breach in 2013.  In fact, most people probably held their breath waiting for notice from the retail giant that their information had been compromised.  The fallout from the Target breach has been staggering:

  • 110 million customers’ information exposed
  • Immediate 50% drop in profits at the time of the breach from the previous year
  • Consumer and media backlash
  • Approximately $252 million spent to manage the breach
  • An escrow account of $10 million set aside for compromised customers
  • Ongoing litigation and regulatory action
  • Target CEO ousted
  • Potential personal exposure to fines and monetary damages for Target executives[v]

What is not commonly known is the source of the hack leading to the Target breach.  According to Krebs on Security, hackers gained access to Target’s network via one of its vendors, Fazio Mechanical, a Pennsylvania based refrigeration company.[vi]  According to investigators, the Target breach “traces back to network credentials” issued to Fazio by Target.   Fazio has stated that its data connection to Target “was exclusively for electronic billing, contract submission and project management[.]”[vii]

It appears that Target’s network credentials were stolen by means of email “phishing” attack sent to employees at Fazio.  Facts indicate that one or more Fazio employees opened the phishing email, thus infecting Fazio’s system and delivering Target’s network credentials to the hackers.  The hackers then planted malware on Target’s system and began stealing credit card data from thousands of Target’s registers nationwide.

Target receives and retains an immense amount of customer information.  As the recipient of this information, Target had a duty to ensure that the third party vendors with which it works have adequate security controls.  There is no question that Target should have done a better job of auditing Fazio’s information security controls and ultimately bears responsibility for the breach.   However, while Target is certainly culpable for the breach (namely failing to timely act on the breach[viii] and sending out inadequate data breach notifications[ix]), it was undoubtedly prepared for the possibility of an attack.  Six months prior to the breach, the retailer had started installation of a $1.6 million malware detection tool designed by FireEye.  FireEye is a leading cyber security firm who provides services to the CIA and the Pentagon.  Target employed a security squad in Bangalore to monitor its system 24/7.[x]  Despite these measures and obscene financial resources, Target was hacked and is now facing reputational damage, lawsuits, and regulatory enforcement.

And it is, in large part, Fazio’s fault.

True, if it wasn’t Fazio, it likely would have been another vendor.  Or perhaps, malefactors could have penetrated Target’s system directly.  However, the facts surrounding the Target breach point blame directly to an unremarkable, “mom and pop” business lacking any information security policies and practices.  In stark contrast to Target’s measures, Fazio primarily relied on the free version of Malwarebytes Anti-Malware (“MBytes”) to detect malicious software on its systems.[xi]  It is unknown if Fazio employed any actual information security protocols, but based on their use of MBytes, it seems likely that they did not.

What is more inexplicable was Fazio’s response to its role in the Target breach.  In a press release, Fazio stated it was “the victim of a sophisticated cyber attack operation,” and further that its “IT system and security measures are in full compliance with industry practices.”[xii]  Clearly, Fazio was out of its depths concerning the technical aspects of information security as well as willfully or unintentionally ignorant of its duties under applicable state and federal law.

First, phishing attacks are not “sophisticated.” Phishing attacks are common.  They are not targeted, but instead use a “blast” approach to distribute the poison pill email as widely as possible.  In fact, email phishing attacks are so unsophisticated that they can be defeated by simply ignoring and deleting the email.[xiii]

Second, while MBytes is a reputable malware program, it is seriously limited.  The free version is an on-demand scan and kill program, which means a user must actually run the scanner or set it to run at scheduled times.  Also, the free version of Mbytes does not offer real-time protection against threats.  Real-time protection means that the software actually blocks or stops malware that is actively trying to infect a system.  Imagine a pop-up blocker, which is a real-time protector.  A pop-up blocker that did not protect in real-time would effectively allow the pop-up to appear, and then only remove the pop-up when the user prompts it to do so.  Essentially, a non-real time malware program is ineffective to prevent malware infections.

Third, Fazio clearly was not in compliance with industry practices.  We have already discussed the limited capabilities of free MBytes above.  Further, the free version of Mbytes is made explicitly for individual users and its license prohibits corporate use.[xiv]  Fazio violated this license, which is definitely not an industry standard. Finally, there is no evidence that Fazio employed any reasonable information security policies and procedures, let alone a written program including preventative measures, training, incident response strategy, and data breach notification plan.  Thus, Fazio quite literally failed to meet the requirements of state and federal information security laws, which ARE the industry standard.[xv]

Information security is not a problem for “big” companies.  Information security is not IT’s problem.  Information security is everyone’s problem.  Do you think your organization is somehow protected from phishing attacks?  It happened to Fazio Mechanical.  Fazio’s role in the Target breach proves that the “little guys” cannot ignore their place in the global marketplace.   According to the Privacy Rights Clearinghouse, 621,955,664 records have been breached in the U.S. since state data breach notifications laws went into effect in 2005.  Those are only the ones that have been reported—experts think the figure is actually much larger.[xvi]

In this modern age, it is best practice to assume that your organization has already been breached or will be breached in the future.  The only way to prevent a breach is to put solid information security policies and procedures into place, train your employees, and regularly test your network security.

Ickes Holt is a full-service, team-driven, and client focused law firm in Northeast Ohio concentrating on information security and governance. Information is the DNA of modern organizations and Ickes Holt is dedicated to advising clients on how to protect its information. Please contact us to discuss establishing or improving the information governance policies for your organization.
















[xv]     See


Budgeting for Information Security

Budgeting for Information Security

Creating a Budget and Optimizing the Money Spent

Traditionally, there has been a lack of organizational focus on information security (IS) as a strategic priority. Where companies have focused on IS, however, the goal is usually achieving compliance as opposed to weaving IS into the organization’s overall strategy. With that in mind, creating and managing an IS budget is not an easy task. Tight budget constraints, ever-evolving threat vectors, emerging technologies, and changing compliance requirements combine to create a natural reluctance to focusing on IS on an annual basis. Most IS managers or executives use peer data or threat versus risk models to determine their budgets instead of employing a set percentage of the organization’s revenue.

Peer data is frequently seen as the most trusted source of budget information but can be difficult to obtain as most enterprises consider such data confidential. And rightly so. However, if nothing else, peer data that is available can still be used to grab leadership’s attention and highlight IS as a budgetary necessity. Then, by using models to measure threats versus risks, organizations are more likely to allocate enough funds to mitigate those risks while ensuring the costs of the controls do not outweigh the costs of the risks.

According to a survey by Wisegate from 2013, the average organization allocated 7.5% of the overall information technology (IT) budget to IS. The average allocation fluctuated between industries, with the banking and financial services industry budgeting 10.4% and government entities budgeting 2.3%. This is likely due to regulation, as the banking and financial services industry is traditionally one of the more heavily regulated sectors.

According to a survey by the SANS Institute, the majority of enterprises are spending 4% to 6% of the IT budget on security, with those spending between 10% to 12% and 21% to 25% growing at an increasing rate. Further, the SANS Institute found that security budgets in 2016 are focusing on developing in-house skills to support application security, intelligence and analytics, and data security. Importantly, the surveys indicate that training and staffing are also among the top predicted spending areas. This data suggests that organizations are transitioning their focus from IS being merely an “IT problem” to an organizational imperative.

Over the last few years, it is clear that IS spending is on the rise. However, successful attacks are also on the rise. This implies, amongst other things, that: (1) malefactors and threat vectors continue to evolve faster than the means to stop them; and (2) the money being spent on IS is not being spent effectively. Many organizations make the mistake of simply buying the latest technology, whether or not it makes the most sense for their security initiatives. Organizational leadership, lacking the requisite legal and technical expertise, simply chooses to throw money at the problem, thinking that “something is better than nothing.” This mentality can be a critical error.

To optimize an IS budget, organizations should first focus on ensuring they have the right number of security personnel for the organization’s size and information profile. Simply, a large multi-national organization that transfers significant data between internal and external clients must have a larger cadre of security personnel than a regional mid-sized manufacturing company. Additionally, organizations must make certain that security personnel have the appropriate proficiency to accomplish the organization’s security goals. While hiring the right people seems easy enough, estimates demonstrate that there could be a 47% shortfall of qualified security professionals over the next few years. Thus, it is essential that enterprises focus on obtaining the right talent sooner rather than later.

To further optimize an IS budget, organizations should analyze potential hardware and software security solutions to verify whether the solutions meet the requirements for their particular security initiatives. Organizations need to assess whether mission-critical employees know how to use, maintain, and safeguard the current system, as well as any potential modifications or upgrades. If not, organizations must be able to identify the cost to appropriately train employees to do so. Also, despite the natural inclination to avoid allocating funds for something that may never occur, it is crucial that organizations budget for incident response. Despite spending money on preventative measures, even the best IS protocols are not foolproof. The probability of a successful attack is only increasing, so preparation for such an event cannot be overlooked or underestimated. Finally, employee training is vital across all departments within the organization. Training is often the most cost effective and practical countermeasure, as people are frequently exploited by malefactors to penetrate organizational defenses.

IS managers or executives need to have the right information in order to obtain buy-in for budgetary requests. They then must effectively communicate that information those holding the purse strings. According to a survey by the SANS Institute, the two most important business drivers behind security spending are: (1) protecting sensitive data; and (2) regulatory compliance. IS managers or executives should take a risk-based approach when addressing budget concerns. By focusing on the risks, organizations are forced to decide if they are willing to take or mitigate the risks. Without knowing and understanding the risks facing the organization, it is all too easy for bottom-line driven executives to ignore very real, and very serious, IS concerns.

If an organization chooses to not take a risk-based approach, then it is all the more important to accumulate correct data points to align the IS budget with the organization’s overall business needs. This can be accomplished by measuring the success of past improvement, ensuring compliance, enabling business objectives, and providing proof of improvements in incident counts and risk profile. IS managers or executives should also collaborate with other departments to ensure there is alignment between the various projects and resources throughout the organization.

Bad budgets happen to good people. However, it is important to remember that the IS threats to, and the legal requirements on, an organization do not disappear because the IS budget is not approved or is less than desired. Therefore, security personnel, including leadership, who are impacted by budgetary constraints must engage in creative and innovative thinking to make the most out of what is available for the organization’s IS concerns.


1. Wisegate, CISOs Discuss Best Ways to Gain Budget and Buy-in for Security, 2013,

2. George V. Hulme, How to optimize your security budget, CSO ONLINE, May 12, 2015, 

3. Joseph Granneman, What are the best approaches for security budgeting?, TECHTARGET, January 2015,

4. Joseph Steinberg, Are You Spending Your Information Security Budget On The Wrong Technology?, FORBES, May 3, 2015, – 5953b82532cd.

5. Barbara Filkins, IT Security Spending Trends, SANS INSTITUTE, February 2016,

CFPB’s DWOLLA Enforcement Action: A Warning to Small Financial Institutions

online banks storing personal data

For the first time since its inception, the Consumer Financial Protection Bureau (CFPB) brought the regulatory hammer down on an organization for allegedly misrepresenting the robustness of its data security program to consumers.   Recently, the CFPB targeted Dwolla, Inc., a provider of an online payment platform and agent of financial institutions Veridian Credit Union and Compass Bank.  As of May 2015, Dwolla had approximately 653,000 members and had transferred as much as $5,000,000 per day.  See CFPB Consent Order.

According to the Consent Order, Dwolla persistently represented to customers that its network and transactions were safe and secure.  According to the Consent Order, Dwolla represented that its data-security practices exceeded industry standards and set “a new precedent for the industry for safety and security.”  Interestingly, according to Dwolla’s recent press release the organization had not detected any evidence of a data breach or received any notifications of a breach in its 5 years of operation.  Despite the lack of a breach, the CFPB levied a substantial penalty against Dwolla, including a $100,000.00 fine and implementation of mandatory audits.

In the Dwolla case, the CFPB adopted an extraordinarily aggressive enforcement posture, especially considering it is the agency’s first data security enforcement action.  Further, CFPB’s enforcement came prior to any known breach, and, in fact, without any evidence of a breach.  Thus, the Dwolla case establishes an immediate precedent that CFPB intends to initiate enforcement actions based upon an organization’s representations concerning its data security practices and is willing to mete out serious consequences for an organizational failure to live up to those representations.  It is only logical to speculate that CFPB will pursue many future enforcement actions against organizations that lack data security practices, regardless of the existence of a breach.  Consequently, the Dwolla case is an opening salvo from the CFPB to which financial services organizations should pay close attention.

The Dwolla case is a cautionary tale presenting many lessons.  One lesson to be learned is that where an organization represents to consumers that it has brawny information security practices, those practices must be the reality.  If the representation does not match reality, the CFPB will wield the might of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to bring enforcement actions again financial services organizations for “unfair, deceptive and abusive practices.”  “Puffery” or “mere marketing” are no longer viable defenses.   Review of the Consent Order (see link above), which is essentially a negotiated settlement between the CFPB and Dwolla, demonstrates that the CFPB based the enforcement action on Dwolla’s alleged deceptive practices in violation of the 12 U.S.C. §§ 5531(a) and 5536(a)(1)(B).

According to the Consent Order, Dwolla made the following representations on its website and through direct communications to consumers:

  • its data security practices “exceeded industry standards.”
  • the company “sets a new precedent for industry safety and security.”
  • that “all” information was “securely encrypted and stored” and utilized the same encryption standards as the federal government.
  • it complied with the payment card (Visa/Mastercard/AMEX) standards for data security, commonly referred to as the “PCI DSS”.

As explicitly stated in the Consent Order, Dwolla, among other things, “failed” to do the following:

  • adopt and implement data-security policies and procedures reasonable and appropriate for the organization.
  • use appropriate measures to identify reasonably foreseeable security risks.
  • ensure that employees who have access to or handle consumer information received adequate training and guidance about security risks.
  • use encryption technologies to properly safeguard sensitive consumer information.


Apparently, prior to 2012, Dwolla’s employees received little to no data security training, including their responsibilities when handling and protecting the security of consumers’ personal information.  In 2012, an independent auditor conducted a penetration test on Dwolla’s systems, which included a spear phishing email attack. 
The Consent Order described the penetration test:

In December 2012, [Dwolla] hired a third-party auditor to perform the first penetration test of In that test, a phishing e-mail attack was distributed to [Dwolla’s] employees that contained a suspicious URL link.  Nearly half of [Dwolla’s] employees opened the e-mail, and of those, 62% of employees clicked on the URL link.  Of those that clicked the link, 25% of employees further attempted to register on the phishing site and provided a username and password.

These results are disturbing and underscore both the reality of insider threats and the importance of employee training.  Despite the poor test results, the CFPB found that “Dwolla failed to address the results of this test or educate its personnel about the dangers of phishing.”  Then, “Dwolla did not conduct its first mandatory employee data-security training until mid-2014.”

Moreover, according the the Consent Order, despite industry standards requiring encryption of sensitive data, Dwolla did the following:

In numerous instances, [Dwolla] stored, transmitted, or caused to be transmitted the following consumer personal information without encrypting that data:

  1. First and last names;
  2. Mailing addresses;
  3. Dwolla 4-digit PINS;
  4. Social Security numbers;
  5. Bank account information; and
  6. Digital images of driver’s licenses, Social Security cards and utility bills.

It is further stated that Dwolla “also encouraged consumers to submit sensitive information via e-mail in clear text, including Social Security numbers and scans of driver’s licenses, utility bills, and passports, in order to expedite the registration process for new users.” 
These are significant missteps by an organization in the business of handling confidential information and financial transactions.

Another lesson present in the Dwolla case is that the CFPB’s aggressiveness mandates proactivity on the part of organizations to establish, implement, and adhere to, sound information security practices.  For its foibles (and bearing in mind that there is no indication a single consumer was harmed), the CFPB fined Dwolla $100,000.00 and also required Dwolla, among other things, to “establish, implement, and maintain a written, comprehensive data-security plan … reasonably designed to protect the confidentiality, integrity, and availability of sensitive consumer information.”  The CFPB further required Dwolla to “designate a qualified person to coordinate and be accountable for the data-security program.” Additionally, Dwolla must “conduct data-security risk assessments twice annually” as well as “conduct regular, mandatory employee training on a) the Company’s data-security policies and procedures; b) the safe handling of consumers’ sensitive personal information; and c) secure software design, development and testing.”   These broad sanctions will ultimately cost Dwolla much more than an information security plan would have prior to the enforcement action, without even taking into account the damage to its reputation, loss of productivity and cost of legal defense.

In response to the Consent Order, CFPB Director Richard Cordray issued the following statement: “With data breaches becoming commonplace and more consumers using these online payment systems, the risk to consumers is growing.” He further commented, “[i]t is crucial that companies put systems in place to protect this information and accurately inform consumers about their data security practices.”

The CFPB is sending a clear message that it intends to hold financial services organizations accountable for their representations about data security practices, regardless of breaches or actual harm to customers.   If the CFPB finds an organization’s data security lacking, or its representations too grandiose, it will levy heavy sanctions, including monetary fines, compulsory implementation of a defined information security program, and mandatory ongoing oversight.

It makes sense that organizations should heed the lessons of Dwolla, and proactively institute sound information security policies and procedures.  Many, if not most, organizations are governed by federal and state information security and privacy laws.  These laws apply regardless of whether the organization realizes it or not.  Organizations need the assistance of knowledgeable and skilled information security and privacy attorneys and other experts to help them navigate the regulatory minefields and develop and implement best practices in their organizations.