Legal News for Tues 11/12 - FTC Marriott Data Breach Settlement, ex-FTC Counsel Joins Lowenstein, Pentagon Leaker Sentencing and Bannon's Upcoming Fraud Trial

Minimum Competence

This Day in Legal History: WTC Bombers Convicted

On November 12, 1997, Ramzi Yousef and two of his accomplices were convicted for their roles in the 1993 bombing of the World Trade Center, marking a significant legal milestone in U.S. counterterrorism efforts. The bombing, which took place on February 26, 1993, involved a truck bomb detonated in the North Tower's underground parking garage, killing six people and injuring over a thousand. The attack was an early sign of the growing threat of international terrorism on American soil, with Yousef aiming to collapse one tower into the other to maximize casualties.

Yousef, the principal architect of the attack, fled the country shortly afterward but was eventually captured in Pakistan in 1995. His trial underscored the challenges of prosecuting acts of terrorism under U.S. criminal law and introduced the public to federal strategies for dealing with international terrorists within the American justice system. Prosecutors successfully argued that Yousef’s attack was part of a larger, ideologically driven campaign against the United States, setting a precedent for treating terrorism as a criminal offense rather than solely a military threat.

The conviction of Yousef and his co-conspirators in a civilian court demonstrated the U.S. government’s commitment to using its judicial system to address terrorism, despite criticisms from some who argued for military tribunals instead. Yousef was sentenced to life in prison without the possibility of parole and was placed in the federal "supermax" facility in Colorado, where he remains to this day. This case highlighted the importance of international cooperation in tracking down fugitives and the evolving strategies to counter terrorism through legal channels in the years before 9/11.

The FTC’s draft settlement with Marriott International over a series of data breaches highlights the agency’s growing support for "right-to-delete" policies, mirroring a trend in state-level privacy laws. This agreement, targeting breaches from 2014 to 2020 affecting 344 million customers, would require Marriott to provide U.S. customers with a way to request deletion of their personal data. Unlike the FTC’s traditional "notice-and-choice" model, this approach shifts responsibility to companies to manage and remove collected data when requested. Experts say the Marriott settlement may be a sign of future federal data privacy directions, especially since the FTC has recently applied similar requirements in cases with companies like Chegg Inc.

As right-to-delete policies expand, companies face challenges navigating varying state privacy laws, with 20 states already enacting or soon implementing data privacy regulations. Ensuring compliance across different jurisdictions requires complex data mapping and collaboration between legal and technical teams to track, delete, and prevent reintroduction of sensitive data. Additionally, reducing retained data may impact marketing strategies that rely on long-term customer data. Marriott’s settlement and the FTC’s recent blog post signal the importance of limiting data collection to only what is operationally necessary, reinforcing the idea that uncollected data cannot be stolen.

FTC's Marriott Data Breach Order Echoes States' Right to Delete

Ryne Miller, formerly the U.S. general counsel for FTX, has joined New Jersey law firm Lowenstein Sandler as a partner to lead its new commodities and derivatives practice. Previously with Sullivan & Cromwell, Miller advised FTX through its bankruptcy proceedings following the crypto exchange’s collapse and founder Sam Bankman-Fried's fraud conviction.

Though Sullivan & Cromwell faced allegations related to FTX's misconduct, Miller was not named in any subsequent litigation. After leaving FTX, Miller founded Miller Strategic Partners, providing regulatory advice in traditional and digital finance. At Lowenstein, Miller will head the commodities and derivatives group and co-chair its crypto practice, aiming to capture the recent surge in U.S.-based crypto interest. His experience, including past work for SEC Chair Gary Gensler at the Commodity Futures Trading Commission, aligns with Lowenstein’s strategic expansion in financial services, fintech, and investment management.

Ex-FTX US Legal Chief Joins Lowenstein, Eying Crypto Resurgence

Jack Teixeira, a 22-year-old Massachusetts Air National Guardsman, faces sentencing for leaking highly classified military documents online, with prosecutors seeking a 17-year prison term. Teixeira, who held a top-secret security clearance as a low-ranking airman, shared sensitive information with a group on the messaging app Discord, reportedly discussing topics like Russia’s war in Ukraine, Israel, Syria, and Iran. He was warned by his superiors twice in 2022 about mishandling classified information, yet he continued to access and share sensitive intelligence. Prosecutors argue his actions represent one of the most significant breaches of the Espionage Act in U.S. history.

Teixeira’s defense team requested a shorter, 11-year sentence, arguing that his intent was to inform his online friends about global events rather than harm the U.S. and citing his struggles with autism and social isolation. In separate military proceedings, Teixeira also faces charges for obstructing justice and failing to follow orders.

Pentagon leaker Teixeira faces sentencing, US seeks 17-year prison term | Reuters

Steve Bannon, former adviser to President-elect Donald Trump, is due back in court ahead of his Dec. 9 trial in New York state on fraud charges linked to a 2019 fundraising campaign for Trump’s border wall. Prosecutors allege Bannon deceived donors, raising over $15 million while secretly diverting funds to the campaign’s CEO, Brian Kolfage, despite promises that all donations would go directly to construction. Bannon, who was previously pardoned by Trump on related federal charges, faces charges in New York state court where presidential pardons do not apply.

Bannon has pleaded not guilty, with his lawyers arguing that he only reimbursed Kolfage for expenses. Kolfage, who pled guilty to federal fraud charges, is currently serving a 4¼-year sentence. Recently released from a four-month federal prison sentence for contempt of Congress after refusing to testify before a committee investigating the Jan. 6 Capitol attack, Bannon has resumed hosting his podcast and claims his legal troubles are politically motivated.

Fresh off prison release, former Trump adviser Bannon due back in court | Reuters

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