Nobody is safe from hackers, a fact evidenced again this month when the federal Office of Personnel Management confirmed that its network had been breached.

A flurry of other recent data breaches has prompted Century City’s Jeffer Mangels Butler & Mitchell to form a practice group dedicated specifically to cybersecurity and privacy. Partners Michael Gold and Robert Braun will head the new group, the firm announced last week.

“We finally got to a point where the matters were numerous enough and significant enough where we realized it’s time to establish an interdisciplinary group to address these client challenges,” Gold said.

Recent incidents, especially the breach at Culver City’s Sony Pictures Entertainment Inc., have increased awareness of the risks associated with cyberattacks. Indeed, Gold said his practice has nearly tripled in the months after the breach at Sony in December.

“It has really been a sea change,” he said. “In the past, what would happen is we would hear from people when there was a security incident or a hack or breach of some kind. But now, while we’re certainly still very active on that front, a large part of our practice is counseling companies that have decided to be more proactive.”

Still, one thing that Gold said many business clients overlook is the human element involved in virtually every data breach that occurs.

While it may sound simple, he said the best ways to avoid a data breach are to ignore suspicious e-mails sent from unknown accounts and to use more complex passwords. He said he’s still surprised by the number of people who post their passwords in an easily visible place at their desks. In short, companies ought to consider employees as another element of their firewalls.

“You’ll be seeing a lot more attention being paid to the human factor and what to do with it,” Gold said. “It’s a terribly important issue.”

SEC Rebuffed

Century City investment firm Pacific West Capital Group Inc. and its owner, Andrew Calhoun IV, this month escaped fraud charges brought by the Securities and Exchange Commission – at least temporarily.

A federal judge rejected the government’s bid to halt Pacific West’s sales of life insurance investment products. The SEC filed a complaint in April alleging Pacific West used proceeds from the sale of new life settlements to pay premiums on old policies that had been sold years earlier.

The SEC alleges that Pacific West orchestrated the scheme to make it appear its earlier investments had been successful, and that it had raised more than $100 million from life insurance investors since 2004.

“Since at least 2012, Pacific West and Calhoun allegedly defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier,” the SEC said in an April press release. “Pacific West and Calhoun did not disclose this practice to investors and undertook it to make life settlement investments appear successful when, in fact, Pacific West had used up the primary reserves to pay premiums on those policies.”

But Judge Fernando M. Olguin, who’s overseeing this dispute, found that the SEC did not provide sufficient evidence to prove that Pacific West’s life settlement arrangements constitute a security under federal law.

“As a result, the SEC has not demonstrated likelihood of success on the merits on any of its claims,” Olguin wrote in a preliminary decision earlier this month.

Jason Lewis, a shareholder at Greenberg Traurig who’s representing Pacific West, said in a statement that the decision is an important victory for the investment firm.

“We believe that the life settlement products sold by Pacific West are regulated by the California Department of Corporations, not the federal government,” Lewis said. “While this ruling does not resolve the litigation, it enables Pacific West to continue offering its products in the State of California as it has done for the past 11 years while mounting a vigorous defense against the SEC’s allegations.”

News & Notes

Cooley has hired Barbara Mirza as a partner in the firm’s compensation and benefits practice in Santa Monica. Mirza previously practiced at Skadden Arps Slate Meagher & Flom. … O’Melveny & Myers has hired three partners to the firm’s white-collar defense and corporate investigations group. Jim Bowman, Maggie Carter and David Kirman, each of whom previously worked at O’Melveny, have rejoined the firm from the U.S. Attorney’s Office for the Central District of California. Bowman and Carter will both work out of O’Melveny’s downtown L.A. office, while Kirman will be based in Century City. … Joel Rothstein has joined the downtown L.A. office of Sidley Austin as a partner in the real estate group. He previously practiced at Paul Hastings. … Fox Rothschild has hired JR Lanis, formerly a partner at Richardson & Patel, as a partner in its Century City office. … Ballard Spahr has tapped Peter Haviland to head the firm’s Century City office as managing partner, effective July 1.

Staff reporter Cale Ottens can be reached at cottens@labusinessjournal.com or (323) 549-5225, ext. 221.

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