TechFite Case Study

Institution

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Submission Date

Contents

A. Application of the Law 2

1. Computer Fraud and Abuse Act (CFAA) and the Electronic Communications Privacy Act (ECPA) 2

Computer Fraud and Abuse Act (CFAA) 3

Electronic Communications Privacy Act (ECPA) 3

2. Laws, Regulations, or Legal Cases Justifying Legal Action for Negligence 4

i. General Data Protection Regulation (GDPR) 4

ii. Federal Trade Commission (FTC) Act Section 5 4

iii. Restatement (Second) of Torts Duty of Care 5

3. Instances of Lack of Duty of Due Care 5

i. Failure to Implement Data Segregation 5

ii. Inadequate Oversight of Privileged User Accounts 6

4. Application of the Sarbanes-Oxley Act (SOX) 6

B. Legal Theories 7

1. Alleged Criminal Activity at TechFite 7

a. Criminal Actors and Victims 7

b. Failures of Cybersecurity Policies and Procedures 7

2. Alleged Acts of Negligence at TechFite 7

a. Negligent Actors and Victims 7

b. Failures of Cybersecurity Policies and Procedures 8

C. Summary for Senior Management 8

References 8

A. Application of the Law

1. Computer Fraud and Abuse Act (CFAA) and the Electronic Communications Privacy Act (ECPA)

The Computer Fraud and Abuse Act (CFAA) and the Electronic Communications Privacy Act (ECPA) are foundational laws in the U.S. legal framework governing computer and network activities. Both statutes directly address the criminal activities discovered within TechFites Applications Division.

Computer Fraud and Abuse Act (CFAA)

The CFAA, codified in 18 U.S.C. 1030, was introduced to combat unauthorized access to computer systems and networks. This act makes it unlawful to gain unauthorized access to or use a protected computer beyond what is permitted, especially when it's being utilized for theft or fraudulent activities (Thomas, 2023). Evidence in the TechFite case shows that workers, including Sarah Miller and Jack Hudson, used privileged accounts to access systems without authorization. This resulted in the unapproved interception of private financial records from several departments. These actions, particularly the unauthorized access to competitors' networks using the Metasploit penetration testing tool, clearly violate the CFAA (Okuh, 2010). The division's activities qualify as unlawful under this act as they involved dumpster diving and infiltrating private business networks without authorization (Walden, 2007).

Electronic Communications Privacy Act (ECPA)

The ECPA, passed in 1986, provided wiretap protections in the electronic communication provisions of the act prohibiting interception or disclosure of a communication without proper authorization (18 U. S. C. 2510-2522) (Gudgel, 2013). In the TechFite case, the following practices, namely unauthorized access to internal emails, executive communications and other employees sensitive client data with no necessary supervision qualify for ECPA violations. It is unlawful to perform such interception and organizations are required to act to make sure that e-communications are secure. Another example of TechFite's void of internal controls entails the lack of control to monitor internal E-mail traffic between divisions which violates ECPA protection (Martin & Cendrowski, 2014). Furthermore, the leakage of, and general conduct within S using the cover of legitimate operations to obtain unauthorized access to sensitive information also shows a great contempt of the law.

2. Laws, Regulations, or Legal Cases Justifying Legal Action for Negligence

The following laws and regulations will help guide the company to ensure that TechFite is penalized for negligence of clients sensitive data. The definition provided for cyber negligence is the failure to exercise reasonable care to avoid harm where there are inadequate information security precautions (ODell, 2023). The following laws apply:

i. General Data Protection Regulation (GDPR)

The GDPR is a European Union regulation, and yet it comes with very high standards for handling the personal data of EU citizens for organizations across the globe. Its broad jurisdiction means any organization processing data of EU residents must comply with its standards. TechFite violates the GDPR if its clientele consisted of individuals or businesses in the EU and they did...

…unauthorized access, using unauthorized accounts with privileged access and accessing some sensitive corporate documents. These actions affect clients such as Orange Leaf Software and Union City Electronic Ventures where their secret information is stolen and shared with their competitors (Koehler, 2017).

b. Failures of Cybersecurity Policies and Procedures

The security measures adopted by the organization known as TechFite were insufficient, especially on aspects related to privileges escalation and account monitoring as well as data separation. There was no functioning internal auditing for this firm hence employees were able to exploit their given privileges without remedy. The absence of certain key measures like periodic check of the user accounts, strict adherence of the principle of least privilege, and separation of responsibilities were also missing (Moore, 2010).

2. Alleged Acts of Negligence at TechFite

Negligence was also pervasive in TechFites business practices.

a. Negligent Actors and Victims

Carl Jaspers, as the head of the Applications Division, bears responsibility for the divisions negligent handling of client data and financial manipulation. Nadia Johnson, the IT Security Analyst, is also culpable for failing to conduct the necessary audits and allowing unauthorized access to persist. The victims include the clients whose proprietary data was mishandled, and the shareholders misled by fraudulent financial reporting (Ribstein, 2002).

b. Failures of Cybersecurity Policies and Procedures

TechFites cybersecurity policies failed to address key vulnerabilities, including the lack of monitoring of privileged accounts and inadequate data loss prevention strategies. These gaps enabled negligent practices to occur unchecked, ultimately harming clients and stakeholders (Bryan & Larsen, 2007).

C. Summary for Senior Management

TechFite faces significant legal liabilities due to both criminal activity and negligence within its Applications Division. The company has violated the Computer Fraud and Abuse Act and the Electronic Communications Privacy Act by allowing unauthorized access to sensitive information. TechFite als violates the Sarbanes-Oxley Act due to its lack of internal…