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The Expanding Scope of Corporate Information Security Obligations

By Thomas J. Smedinghoff
March 21, 2006

Protecting the security of corporate information and computer systems is becoming a major legal requirement for businesses. Driven by several recent highly publicized security breaches involving personal information, strong pressures are building for enhanced corporate obligations to implement appropriate information security measures to protect personal data and the people it describes.

Described by many as the 'perfect storm,' the latest chapter in the controversy began in mid-February 2005. At that time, ChoicePoint, Inc. disclosed that sensitive personal information it had collected on 145,000 individuals had been compromised, and was at risk of unauthorized use for purposes such as identity theft. In the 7 months that followed, more than 71 additional companies, educational institutions, banks, and federal and state government agencies (almost all household names) also disclosed security breaches involving sensitive personal information in their possession. Taken together, these breaches involved records on more than 50 million individuals. (For a chronology of these security breaches and a running total of the number of individuals affected, see Privacy Rights Clearinghouse at www.privacyrights.org/ar/ChronDataBreaches.htm.)

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