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As headlines continue to report data security breaches at an alarming rate, discussion often focuses on the need for enhanced technical controls, such as two-factor authentication and encryption, to protect sensitive, personally identifiable information. The role of the company employee, both as the cause of, and the first line of defense against, security breaches is often lost in the analysis. Yet developing law is increasingly requiring administrative or procedural controls, particularly those directed at employees, as a component of a legally compliant security program.
Employees can be the source of major threats to a company's data security. They need not be bad actors in order to compromise their company's data security. Often it is the innocent actions of employees (eg, losing a laptop with key data unprotected or succumbing to a third party's social engineering techniques) that leave a company facing a breach situation. At the same time, employees are key to a company's successful compliance with various legal and administrative requirements involving data security.
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The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
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