Reference no: EM133460295
Case Study: From a given fact-pattern, choose a particular type of potential litigation that may arise from the fact pattern and define the claim(s) as well as potential defenses.
Hypothetical fact pattern: Globrantics is a publicly traded, worldwide hotel chain incorporated in the state of Delaware with properties throughout the United States and most of the world. Beginning in 2014, Globrantics suffered a series of three data breaches which led to the compromise of over 15 million customers' personal data/information. The FTC is currently investigating these three data breaches and alleges that Globrantics's cybersecurity defenses were woefully inadequate for the amount of personal data stored within its electronic network. Thus far, information for approximately 37,500 Globrantics customers has appeared on the dark web-although an open question remains as to whether the information has been sold or utilized in any manner.
Globrantics discovered the data breaches on December 6, 2018, at which point its stock was trading on the New York Stock Exchange at $143.28 per share. The CEO of Globrantics, as well as the CISO, decided (unilaterally and without consultation with the Board of Directors) that since the company was in the midst of a very successful holiday travel season, they would not inform the public of the breaches until a later date. They did, however, retain a forensic team to alleviate the dangers associated with the data breaches, and shore up their internal cybersecurity defenses.
On January 10, 2019, the IT Director-who reports directly to the CISO-sold 20,000 shares of Globrantics's stock, at a price of $155.00 per share.
Globrantics finally acknowledged the data breaches on May 22, 2019-after a WikiLeaks report surfaced which suggested that the company had suffered a series of devastating cyber-attacks. Over the next week, Globrantics's stock value plummeted to $57.50 per share-where it bottomed out on May 29, 2019. Currently, Globrantics's stock has rebounded and is now being traded at $94.75 per share.
Neil Diamond, a Premium Elite Extra-Special Platinum Member of Globrantics, recently received notification from his bank that $5,000.00 was wire-transferred to a former Soviet nation-state without his permission. Mr. Diamond has also noticed that he is receiving a large amount of spam e-mail to his work account.
Question: Please detail two potential claims that could arise, and identify who could bring such claims, facts that support these claims and unanswered questions that would impact the strength of the claims. Conversely, please also provide potential defenses to both claims.