All posts by Jones Morrison

Divorce Finances: Know the Numbers

8e2a95a81bd67d6d59f9fc086239d1be

 

Most people are not born independently wealthy so saving for retirement is a part of budgeting. Ideally married couples work together to save money for their old age.  They know exactly how much the other has and they know how it has been invested, right?

Fidelity Investments recently published the 2015 edition of it’s online biennial Couples Study. Surprisingly, the study showed that although many couples think they communicate well about money 40% of the couples surveyed didn’t know how much money their spouse made the previous year.

Sadly, the study also showed that over 50% of the couples did not know how much money they would need in retirement to maintain their current standard of living.  What does this have to do with divorce? Imagine how difficult it would be for someone to ask for a fair settlement in a divorce if they don’t know how much money their spouse made or how much money they needed to maintain their current standard of living?

Investment companies like Fidelity help people improve their understanding of the family finances.  A good place to start is taking an active role in understanding the tax returns or reading the credit card bills.  When someone is getting divorced or thinking about getting divorce, and if they have never managed their own finances before, it is a good idea to look for an investment firm and financial advisor to help.

From the perspective of a divorce attorney,  it seems that often times one spouse is more prepared than the other.  Generally people don’t plan their divorce, and often end up with a lack of financial literacy.  When a person receives a large settlement and is responsible, for the first time in many years, for paying the bills solo then financial literacy has real implications for the future.

In New York and many other states a person is entitled to half of their spouse’s IRA, 401K, or other retirement investment if they have been married at least 10 years.  There are also statutes now which determine temporary and permanent alimony payments and child support.  At Jones Morrison, we can help teach financial literacy and provide the financial and litigation support necessary to successfully navigate the future.

Allison Levinson
Of Counsel, Jones Morrison, LLP

Liability Protection for Firms That Share Cybersecurity Information?

binary-1187194_960_720

In November 2015, I wrote about a symposium conducted by the FBI and Secret Service to partner with the private sector on shared cybersecurity concerns.  One of the open issues from that symposium concerned potential liability for firms that shared cybersecurity information with law enforcement.  Those issues were supposed to be addressed in the Cybersecurity Act of 2015, which the President signed into law December 18, 2015.

Were they?  The Act includes provisions that deal with some of the concerns from firms that share information with law enforcement and with one another. The statute provides the following:

  • For private entities that share information with the federal government in accordance with the Act, the law provides that there is no legal cause of action against those entities.[1]
  • Cyber threat indicators and defensive measures that private entities share with federal government or with a state, tribal or local government under the Act may not be used to regulate those entities, including enforcement actions.[2]
  • Private entities do not waive privilege when they share information with the federal government.[3]
  • Private entities can declare shared information to be proprietary and confidential.[4]
  • Sharing of cyber threat information among private entities will not violate antitrust laws.[5]

The government can only use business-supplied information for a “cybersecurity purpose.”  That is, the information can only be used to protect “an information system or information that is stored on, processed by, or transiting an information system from a cybersecurity threat or security threat or security vulnerability.”[6] Nor can the government release that shared information to the public, including through freedom of information requests made to federal, state, and local government.[7]

Is the Act significant?  Some commentators have yawned.  One called the law’s focus “fairly modest,”[8] and stated that “companies are not especially concerned about potential liability arising from such sharing.”[9]  Forbes wrote that the bill “will likely be ineffective in the prevention of cybercrime[, and has been]…criticized for the litany of privacy issues it could potentially introduce.  At its best, the bill…[is] a step in the right direction in the fight against cybercriminals.”[10] And while some contend that many companies are already sharing cybersecurity information,[11] other tech companies (such as Apple and Twitter) have stated they would not participate in the sharing program.[12]

But others have pointed to the Act’s protections to businesses that choose voluntarily to share information.  Those include:

  • An expansive safe harbor from liability, with protections for private entities from civil, regulatory, and antitrust liability.[13]
  • No requirement that firms act after they receive shared cybersecurity information.  Though not acting creates its own problems: the law does not shield those firms from liability. “An entity that receives information about a cybersecurity threat to its networks may remain subject to claims premised on common law causes of action such as negligence if it fails to respond diligently.”[14]
  • Authorizing private entities to use defensive cybersecurity measures on a firm’s information systems and those of other consenting entities. Note, though, that the Act doesn’t green-light measures that go on the attack against hackers, in order to “destroy, render unusable, provide unauthorized access to, or substantially harm third­party information systems.”[15]

To benefit from the Act, firms are required to take certain steps, including removing personally identifiable information not directly related to a cybersecurity threat, from information provided to either the government or shared with another firm.[16] And “[e]ntities that share information should keep clear records evidencing their compliance with [the Act] to ensure they can benefit from its liability protections.”[17]

The new law may ultimately call for reduced expectations.  That understood, the Act could result in a little more certainty for firms that share cybersecurity information with one another and with the federal government.

Bohdan S. Ozaruk
Of Counsel, Jones Morrison, LLP

________________________________________

The information in this article is for general use, and may not be applicable in all situations.  You should not act on it without specific legal advice based on your particular circumstances. The views expressed in this article should not be attributed to Jones Morrison LLP, its attorneys, or its clients.


[1] Cybersecurity Act of 2015 §106(a)-(b) (“[n]o cause of action shall lie…against any private entity, and such action shall be promptly dismissed, for the monitoring of an information system….[and] for the sharing or receipt of a cyber threat indicator or defensive measure….”) (Act)

[2] Sullivan & Cromwell discusses The Cybersecurity Act of 2015, CLS Blue Sky Blog, (Jan. 6, 2016) 4/7, http://clsbluesky.law.columbia.edu/2016/01/06/sullivan-cromwell-discusses-the-cybersecurity-act-of-2015/ (Blue Sky Blog)

[3] Act, §105(d)(1) (“shall not constitute a waiver of any applicable privilege or protection provided by law, including trade secret protection.”)

[4] Act,, §105(d)(2) (cyber threat or defensive measure…shall be considered the commercial, financial, and proprietary information of such…entity when so designated by the…entity….”)

[5] Act,, §104(e)(1) (“it  shall  not  be  considered  a  violation  of  any provision of antitrust laws for 2 or more private  entities  to  exchange  or  provide  a  cyber  threat  indicator  or  defensive  measure,  or  assistance  relating  to  the  prevention,  investigation,  or  mitigation  of  a  cybersecurity  threat,  for  cybersecurity  purposes….”)

[6] Act,, §102(4).  An “information system” is “a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information.”  Id., §102(9)(A) (incorporating by reference, 44 U.S.C. §3502(8)).

[7] Act,, §105(d)(3)(B) (“cyber threat or defensive measure…shall be…withheld, without discretion, from the public under section 552(b)(3)(B)…and any State, tribal, or local provision…requiring disclosure of information or records….”)

[8] Cadwalader, President Obama Signs Cybersecurity Act of 2015 to Encourage Cybersecurity Information Sharing, (Dec. 24, 2015), http://www.cadwalader.com/resources/clients-friends-memos/president-obama-signs-cybersecurity-act-of-2015-to-encourage-cybersecurity-information-sharing (Cadwalader).

[9] Id.

[10] Forbes, The Problems Experts And Privacy Advocates Have With The Senate’s Cybersecurity Bill, 1/6, http://www.forbes.com/sites/abigailtracy/2015/10/29/the-problems-experts-and-privacy-advocates-have-with-the-senates-cybersecurity-bill/print/

[11] Forbes, 3/6

[12] Corey Bennett, Major Tech Group Comes Out Against Cyber Bill, The Hill (Oct. 15, 2015, 12:34 PM), http://thehill.com/policy/cybersecurity/257029-major-tech-group-opposes-cyber-bill (cited in Cadwalader)

[13] Blue Sky Blog, 2/7 (“Once triggered, CISA’s safe harbors from liability are broad. Private entities sharing information are generally shielded from civil, regulatory, and antitrust liability based on their sharing.”)

[14] Blue Sky Blog, 2/7.

[15] Blue Sky Blog, 2/7.

[16] Cybersecurity Act, §104(d)(2) (“A  non-Federal  entity  sharing  a  cyber  threat indicator… shall,  prior  to  such  sharing…review  such  cyber  threat  indicator  to assess  whether  such  cyber  threat  indicator  contains  any  information  not  directly  related  to  a  cybersecurity threat that …identifies  a  specific  individual  and  remove such information; or…implement and utilize a technical capability  configured  to  remove  any [such personally identifiable] information….”)

[17] Blue Sky Blog, 2/7.

Four Things to Keep In Mind when Renewing Insurance

87dd945f-d4db-4f37-8fcc-7fc46e4ccd0f

As the New Year rolls around, the time comes for many of us to renew our insurance policies for work and home, property and liability. While many of us just keep writing that premium check without thinking twice about it, ever changing life and business situations also change our risks and exposures. A little attention to insurance coverage now can avoid large problems later when it comes to evaluating whether insurance coverage provides the protection required. Here are four things to keep in mind when it comes time to renew an insurance policy.

1. Read the old policy.

While insurance policies can be intimidating, one needs to try to be familiar with the contents of the policy. Absent unusual language or circumstances, the law generally assumes that policy holders read and understand their insurance policy. While they aren’t expected to be an insurance lawyer, they do need to know if the policy covers all the risks that that may be encountered. Does the property insurance have a high enough coverage limit to replace jewelry or computer equipment in the case of a burglary? Does the policy contain language excluding coverage for a risk that didn’t exist in the past but does now (such as a swimming pool or a large dog)? It is difficult to assess whether the coverage is sufficient without knowing what the coverage is.

2. Communicate with the broker about life or business changes since the last renewal, including major purchases that should be protected.

An insurance broker can be an excellent resource for helping to obtain coverage and comply with the terms of the policy. A broker can help work through the application process, help to file claims, and discuss the different types of insurance products that are available. The assistance the broker provides, however, can only be as good as the information provided to the broker.  Under New York law, an insurance broker does not have the obligation to advise clients regarding the sufficiency of coverage, only to obtain the coverage that the client specifically requests. The policyholder will bear the consequences for any mistakes, so they are responsible for adequately communicating the risks. Many brokers provide their clients with a checklist at renewal time to go over any major life changes that could affect coverage. If they don’t, however, the insured has the responsibility to provide the broker with any information that would be relevant to the renewal, including new risks or the need for new limits.

3. Be wary of quotes for significantly lower premiums.

Insurance companies make their money by pooling risk and taking in more money in premiums than they pay out. As such, they have teams of underwriters and actuaries determining the amount they need to charge for the coverage they provide. If, when obtaining a variety of quotes for coverage one comes back substantially lower than all the others, make sure that there aren’t any hidden exclusions or limitations on the policy. For example, liability policies that contain exclusions for injuries to employees or injuries arising out of completed operations are generally much cheaper than policies that provide coverage for those risks. Depending on the business, the majority of exposure may fall into one of those categories and having a policy that contains such an exclusion could lead to financial disaster if a loss is suffered. It is a good idea to bring the policy to an attorney for review prior to jumping on what seems like a good deal, only to find out that it isn’t the type or amount of coverage needed.

4.  Make sure the insurance covers the obligations under a lease or other contract.

The majority of people and businesses are either landlords or tenants, and there are some common insurance issues that come up in leases. For tenants, does the written lease contain a provision requiring the name of the landlord on the insurance policy? For landlords, does the insurance contain a provision that the insurance is invalid unless coverage is obtained from tenants as well? Does a lease require that there is a written agreement to waive subrogation against the landlord for damages covered by insurance? If an attorney helped with the lease, the attorney can be asked to look at the insurance policy to ensure that it complies with the lease terms. Failure to comply with the terms of the lease can leave one as exposed as if they did not have any insurance coverage at all.

 

Jeffrey Briem
Senior Attorney, Jones Morrison, LLP

Capitalizing on Creativity Drives Business Success

Screen Shot 2015-12-14 at 10.35.33 AM

Managing creativity in the technological driven marketplace is the path to a flourishing economic advantage over one’s competitors and a necessary prerequisite for mining acquisition, investment or joint venture opportunities.  A successful enterprise marketing strategy stems mostly from continuously assessing and managing a corporate intellectual property portfolio. Think of innovation as the creation of a beautiful garden of ideas with their beauty flowering individually and as part of a larger image.  To capitalize on those intellectual property rights the company needs to have the legal framework in place and a cross-disciplinary team to protect the confidentiality of its trade secrets, enforce its legal rights thereby preventing others from illegally profiting through infringement and create assignment or licensing opportunities to provide a steady stream of revenues.

The first step to successful intellectual property portfolio management is to review all documentation to make sure that the rights are adequately protected. Doing so entails several legal practice areas. For example, a labor and employment lawyer will look to see that all employment agreements have non-compete and confidential provisions in place and together with an intellectual property lawyer prepare  work for hire agreements and invention and disclosure agreements assuring that the company is the owner of the patent, trademark or service mark.  The legal right arises from the intellectual property lawyer filing, maintaining and enforcing applications before the United States Patent and Trademark Office as well as working with local counsel on worldwide rights.  A corporate generalist attorney will assist in helping monetize those rights through structured finance agreements and conduct due diligence for domestic and cross border deals.

In sum, a company that can successfully protect its intellectual property portfolio in essence is guarding its business income from competitive threat and assuring its survival in the ever changing technologically driven market place.  Accordingly having the right team in place is essential for the reasons mentioned above as well as data privacy issues associated with a company’s website.

 

Adriana Kierszenbaum
Attorney, Jones Morrison, LLP

Kids X-Press, Inc. Recognizes Stephen Jones as “Dream Big” Honoree at Annual Touch the Sky Reception

Screen Shot 2015-12-01 at 9.44.22 AM
Jones Morrison, LLP is pleased to announce Stephen Jones, our managing partner, was recognized as a “Dream Big” honoree at Kids X-Press Inc.’s Annual Touch the Sky reception.

 

Steve expressed his appreciation saying, “Reading has been for me a window on the world, past, present and future. I have connected with people I will never meet, some who never existed. Reading and my books have been constant companions and the path to a bigger future. The work of Kids X-Press is of unlimited opportunity. Thanks to you for the recognition.”

 

Kids X-Press, Inc. is a non-profit organization that promotes learning, literacy and leadership to children of all backgrounds and abilities.  Through its magazine and program, Kids X-Press, Inc. encourages children to express themselves by providing them with a forum through which they can communicate.  Marsha Tom, Executive Director of Kids X-Press said, “We were proud to recognize an impressive list of honorees who come from a variety of fields and embody the very lessons that Kids X-Press espouses to its students: that success can be achieved through hard work, determination and dreaming big.  Events like ‘Touch the Sky’ enable us to enrich, support and develop young talent from throughout our communities and further.”

 

Stephen Jones, along with several other honorees, was acknowledged for being a role model to the children that participate with Kids X-Press.  The other honorees included Brooke Baldwin, CNN Reporter/Anchor; Peter Herrero, Founder and General Manager of New York Hospitality Group; Tom Kallish, Founder of Tommie Copper, Inc.; Kenneth Theobalds, Vice President of Government & Regulatory Affairs, Entergy Nuclear; and Nivia Viera, founder of Kids X-Press and magazine publisher, who retired in May after 14 years with the organization.  ”All of the honorees have made incredible contributions to the community and we are thankful for their passion to make a difference,” said Yuval Marcus, chairman of the Kids X-Press Board of Directors.

 

The event was held at C.V. Rich Mansion in White Plains on October 28, 2015.  For more information about Kids X-Press, Inc., visit here.

FBI and U.S. Secret Service Host Cybersecurity Outreach Effort

banner-909710_640

On October 22, 2015, the FBI and U.S. Secret Service hosted a meeting of representatives from both agencies, along with representatives from the financial services sector.  The meeting was in connection with law enforcement’s stated desire for a “partnership” with the private sector on common concerns about cybersecurity.  The FBI has stated that “after more than a decade of combating cybercrime through a nationwide network of interagency task forces, the FBI has evolved its Cyber Task Forces (CTFs) in all 56 field offices to focus exclusively on cybersecurity threats.”[i]  Both agencies also discussed coordination among and within their agencies, so that law enforcement’s cyber efforts are not patchwork.

Law enforcement benefits from private sector reporting, particularly as it affects crime solving and trends.  But law enforcement also offers the businesses resources for detection and prevention.

Some statistics:

  • Average annualized cost of cybercrime from a benchmark sample of U.S. organizations was $15 million, representing a nearly 20 percent increase year over year.[ii]
  • The average time it takes to resolve a cyber-attack (46 days) has increased by nearly 30 percent during the most recent six-year period.[iii]
  • The average cost incurred to resolve a single attack totals more than $1.9 million.[iv]
  • small organizations incur a “significantly” higher per capita cost for cybercrime than larger organizations. [v]
  • The most costly cybercrimes are caused by denial of service, malicious insiders and malicious code. Those crimes accounted for more than 50 percent of all cybercrime costs per organization on an annual basis. [vi]

Some of the takeaways from the meeting:

  • Businesses should report cyber breaches immediately to the FBI or Secret Service, or as soon as practical.  More information about doing so is located at http://www.ic3.gov/default.aspx and http://www.secretservice.gov/investigation/#cyber Both agencies emphasized that businesses can contact either agency, since both share information about cyberattacks and investigations.
  • The FBI and Secret Service both regard businesses compromised by cyber-attacks as “victims,” not as prospective referrals to regulators.  They make no promises, however, that law enforcement won’t refer a matter to a regulator in an appropriate circumstance.  Recent legislation, passed in the U.S. Senate, may provide some protections to business for cyber information sharing with law enforcement.  That legislation “would extend protections to organizations [that] decide to share information with the Department of Homeland Security and the FBI, pooling it in a database designed to aid U.S. authorities in their ongoing war with cybercriminals.”[vii]  But whether these “protections” include regulatory referral is unclear.[viii]  And the legislation as of this writing has not been enacted into law.
  • The FBI and Secret Service will not provide post-incident remediation to a cyber-attacked business.  But the agencies provide pre-attack generalized assistance, including outreach to public and private sector partners, by providing strategic reports and sector-specific threat briefings.  And the FBI provides the public with a post-attack online reporting mechanism for suspected Internet-facilitated crime, including intellectual property theft and online fraud.

The FBI’s resources:

  • The FBI’s website provides information about InfraGard, a non-profit organization and public-private partnership between the FBI and business members.  The program “brings together representatives from the private and public sectors to help protect our nation’s critical infrastructure and key resources from attacks….”[ix]
    • InfraGard members get access to an FBI secure communications network featuring an encrypted website, web mail, listservs, and message boards. The website plays an integral part in information-sharing efforts, and can disseminate threat alerts and advisories. It also provides information about intelligence products from the FBI and other agencies, and last year posted more than 1,000 of them, along with giving InfraGard members the ability to offer feedback.
    • You can get more information from InfraGard’s public website (https://www.infragard.org/) or contact your local FBI field office.  Membership in InfraGard includes:
      • a secure information portal, iGuardian, which is allows industry-based partners to share cyber intrusion incidents in real time and receive training and cyber threat reports. All iGuardian incident submissions are processed through the FBI’s CyWatch website (cywatch@ic.fbi.gov) for immediate action.
      • Malware Investigator, a secure online venue that collects file identifiers, virus scanning, and malware mitigation.
      • The FBI provides prevention and mitigation techniques for computer intrusion.  That information is located at http://pdxccc.org/wp-content/uploads/Prevention_v4.pdf.

These resources will be particularly valuable for businesses whose management has not been appropriately focused on cybersecurity.  The data on cybercrime and the headlines about breaches speaks for itself.  Businesses should assume they will be targeted, not “if,” but “when.”

Bohdan S. Ozaruk

Attorney, Jones Morrison, LLP


[ii] Marketwatch, Annual Study Reveals Average Cost of Cyber Crime per Organization Escalates to $15 Million, (Oct. 16, 2015), available at http://www.marketwatch.com/story/annual-study-reveals-average-cost-of-cyber-crime-per-organization-escalates-to-15-million-2015-10-06

[iii] Id.

[iv] Id.

[v] Id.

[vi] Id.

[vii] Legaltech News, What CISA Means for Organizations and Their Data (Nov. 3, 2015), available at http://www.legaltechnews.com/id=1202741474408/What-CISA-Means-for-Organizations-and-Their-Data#ixzz3qjKmSQuM

[viii] A recent law blog stated that “[a]s a general proposition, companies sharing information about “’cyber threats’” through the reporting mechanisms outlined in CISA would be awarded liability protection from lawsuits relating to data sharing.”  Data Security Law Blog of Patterson Belknap Webb & Tyler LLP, Truth or Consequences: Does the Senate’s Information Sharing Bill Really Help Business? (Oct. 30, 2015) (emphasis added), available at http://datasecuritylaw.com/blog/truth-or-consequences-does-the-senates-information-sharing-bill-really-help-business/

Husband Files for Divorce After Taking $25M Worth of Art

By DivorceMagazine.com

husband files for divorce

Tracey Hejailan-Amon, a Manhattan socialite, filed a lawsuit against her husband, millionaire Swiss entrepreneur Maurice Alain Amon, after claiming he hid anart collection valued at $25 million before filing for divorce.

Hejailan-Amon, who was in Europe when Amon filed for divorce, stated that she collected the artwork – between 17 and 20 pieces – during the couple’s marriage. The collection included pieces by Andy Warhol, Jean-Michel Basquiat, Damien Hirst, and other artists.

In her lawsuit, which was filed on Monday, she described her husband’s removal of the artwork from their $16 million Manhattan apartment as “illegal and unlawful,” claiming the artwork is marital property. Hejailan-Amon’s lawsuit states the couple did not sign a prenuptial agreement.

According to attorney Sarah B. Hechtman – who practices practices matrimonial and family law at Jones Morrison, LLP in Westchester NY – Amon did not have the right to take the artwork or attempt to sell it. “In New York, the law provides that neither spouse may transfer or sell or otherwise disturb any assets pending resolution of the matrimonial case,” she explained. “During the litigation (or settlement negotiations) of the matter, it will need to be determined what is marital property and thus subject to equitable distribution, and what is separate property.”

Peter Bronstein, a lawyer for Amon’s private company, has claimed that his client has full ownership of the artwork and that it is not marital property, adding that Hejailan-Amon was aware of Amon’s plan to remove the art from their apartment.

“If the art was purchased with marital or joint assets, then the court would find (or the parties would agree) that it is marital property and would divide it between the parties ‘equitably’ or fairly,” said Hechtman.

According to Hejailan-Amon, Amon had the artwork taken to a Queen’s store facility in October before filing for divorce in Monaco – where there’s no legal concept of shared property. In the lawsuit, she stated her husband had already put one painting up for auction. Amon claims to have residency in Monaco; however, Hejailan-Amon says the couple never lived in the country.

Hejailan-Amon, 47, and Amon, 64, married in Hong Kong in 2008. Since then, they have lived in various cities around the world. According to her lawyer, Aaron Richard Golub, Hejailan-Amon was not aware Amon was planning a divorce. “She was in Europe and she didn’t even know what was going on. She thought she was happily married,” Golub told the New York Post.

This isn’t Amon’s first conflict over marital property. Amon, who owns a security company, was previously married to Roberta Amon – whom he divorced in 2005. His ex-wife sued him for her share of marital money, according to New York Daily News.

“SUCCESS”ion Planning Tips

Screen Shot 2015-10-02 at 2.36.55 PMThe SUCCESS acronym I coined stands for:
Safeguarding leadership and lateral continuity by
Understanding the technical and political implications when developing
Competency models that identify future requirements for internal candidates and
Confidentially identify an external pipeline of candidates that combined
Ensure that the business fluidly adapts its
Strategic vision for continued
Success.

Why is it important for a company to seek legal counsel in the succession planning process?
There can be a myriad of corporate, employment and estate planning issues. First, for example, when Human Resources develops future competency models, careful attention must be paid to the words used to identify the core requirements. In addition, an objective feedback system needs to be implemented that not only complies with the company’s employee handbook, but also state and federal labor and employment laws. Second, both disgruntled internal candidates and communications with external pipeline candidates can pose confidentiality issues with regards to trade secrets and non-compete concerns that, in the end, affect the company’s profitability. Third, safeguarding leadership and lateral continuity may impact trust and estate issues, especially with regards to a family business.

Regularly planning for success, instead of yearly reviewing a succession plan, combined with seeking the advice of an attorney allows a business to fluidly adapt its succession plan to meet business needs and objectives. This will also, hopefully, prevent costly litigation that derails profitability. After all, if an employee is busy being deposed for a lawsuit, then they are being taken away from the technical and business proficiencies that contribute to the company’s SUCCESS.

Adriana Kierszenbaum
Attorney, Jones Morrison, LLP