FTC Hosts FinTech Forum on Artificial Intelligence
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Posted On: 06/21/2018 10:19:55 AM
FTC Hosts FinTech Forum on Artificial Intelligence and Blockchain Technologies, Part II
"..As previously reported, on Thursday, March 9th, the Federal Trade Commission (FTC) hosted a forum on the consumer implications of recent developments in artificial intelligence (AI) and blockchain technologies. This is the second of two entries on the March 9th FinTech Forum. Today’s post focuses blockchain technologies. Coverage of the opening remarks and the AI discussion may be found here.
Blockchain Technologies
The panel discussions on blockchain technologies reflected the nascent stage of the technology, with industry representatives expressing confusion over the applicability of current regulation, and regulators expressing a lack of clarity over jurisdictional questions. Although blockchain technology is currently being utilized primarily for digital currencies such as BitCoin, the technology is beginning to proliferate in other sectors and many uses remain untapped. As panelist Peter Van Valkenburgh, Director of Research at the Coin Center, explained, blockchain technologies are simply “connected computers reaching agreement over shared data.” Where connected computers have shared data, each node can be used by another to verify identity credentials (including personal data such as credit scores), property records, or provisions of digital goods. Upon verifying the information the connected computers can also execute a transaction against that shared data as is the case, for example, in securities transactions.."
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https://www.hldataprotection.com/2017/03/arti...s-part-ii/
For First Time, SEC Imposes Fines Based Solely on Privacy Violations
"..The Securities and Exchange Commission (SEC) announced yesterday that three former executives of GunnAllen Financial, Inc., a Tampa-based broker-dealer, agreed to settle charges that they had violated Regulation S-P by failing to protect confidential information about their customers. This action marked the first time that the SEC had assessed financial penalties against individuals charged solely with violations of Regulation S-P, which requires broker-dealers, investment advisers, and other financial institutions under the SEC’s jurisdiction to protect their customers’ nonpublic personal information and to provide their customers the right to opt out of having their information shared with unaffiliated third parties.
According to the SEC’s orders, as GunnAllen was winding down its business operations last year, the firm’s national sales manager, acting with the authorization of its president, transferred the names, addresses, account numbers, and asset values of more than 16,000 customers to a portable USB drive and provided those records to his new employer. The SEC determined that this transfer violated Regulation S-P because account holders were notified about it after the fact and not given reasonable notice and opportunity to opt out. The SEC also found that GunnAllen’s former chief compliance officer failed to ensure that the firm’s policies and procedures were reasonably designed to safeguard confidential customer information. According to the SEC, the policies and procedures were vague and simply recited the relevant portions of Regulation S-P verbatim, rather than specifying the security measures actually adopted by the firm. In addition, the compliance officer failed to revise or supplement the policies and procedures in response to several security breaches that occurred between 2005 and 2009.
GunnAllen’s president and national sales manager each agreed to a $20,000 fine, and the chief compliance officer agreed to a $15,000 fine. In addition, all three, without admitting wrongdoing, agreed to SEC censure.."
https://www.hldataprotection.com/2011/04/arti...iolations/
"..As previously reported, on Thursday, March 9th, the Federal Trade Commission (FTC) hosted a forum on the consumer implications of recent developments in artificial intelligence (AI) and blockchain technologies. This is the second of two entries on the March 9th FinTech Forum. Today’s post focuses blockchain technologies. Coverage of the opening remarks and the AI discussion may be found here.
Blockchain Technologies
The panel discussions on blockchain technologies reflected the nascent stage of the technology, with industry representatives expressing confusion over the applicability of current regulation, and regulators expressing a lack of clarity over jurisdictional questions. Although blockchain technology is currently being utilized primarily for digital currencies such as BitCoin, the technology is beginning to proliferate in other sectors and many uses remain untapped. As panelist Peter Van Valkenburgh, Director of Research at the Coin Center, explained, blockchain technologies are simply “connected computers reaching agreement over shared data.” Where connected computers have shared data, each node can be used by another to verify identity credentials (including personal data such as credit scores), property records, or provisions of digital goods. Upon verifying the information the connected computers can also execute a transaction against that shared data as is the case, for example, in securities transactions.."
Read More...
https://www.hldataprotection.com/2017/03/arti...s-part-ii/
For First Time, SEC Imposes Fines Based Solely on Privacy Violations
"..The Securities and Exchange Commission (SEC) announced yesterday that three former executives of GunnAllen Financial, Inc., a Tampa-based broker-dealer, agreed to settle charges that they had violated Regulation S-P by failing to protect confidential information about their customers. This action marked the first time that the SEC had assessed financial penalties against individuals charged solely with violations of Regulation S-P, which requires broker-dealers, investment advisers, and other financial institutions under the SEC’s jurisdiction to protect their customers’ nonpublic personal information and to provide their customers the right to opt out of having their information shared with unaffiliated third parties.
According to the SEC’s orders, as GunnAllen was winding down its business operations last year, the firm’s national sales manager, acting with the authorization of its president, transferred the names, addresses, account numbers, and asset values of more than 16,000 customers to a portable USB drive and provided those records to his new employer. The SEC determined that this transfer violated Regulation S-P because account holders were notified about it after the fact and not given reasonable notice and opportunity to opt out. The SEC also found that GunnAllen’s former chief compliance officer failed to ensure that the firm’s policies and procedures were reasonably designed to safeguard confidential customer information. According to the SEC, the policies and procedures were vague and simply recited the relevant portions of Regulation S-P verbatim, rather than specifying the security measures actually adopted by the firm. In addition, the compliance officer failed to revise or supplement the policies and procedures in response to several security breaches that occurred between 2005 and 2009.
GunnAllen’s president and national sales manager each agreed to a $20,000 fine, and the chief compliance officer agreed to a $15,000 fine. In addition, all three, without admitting wrongdoing, agreed to SEC censure.."
https://www.hldataprotection.com/2011/04/arti...iolations/
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