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Cybersecurity: Risks and Opportunities for Investors and Managers

May 18, 2018 @ 7:30 am - 8:50 am

Event Recap:

This note summarizes our well-attended and sixteenth meeting of the Center for Free Enterprise sponsored by JP Morgan Private Bank, the Calkins Law Firm and Red Hawk Associates.

About our distinguished panelists:

Paul Beckwith is Chief Security Officer for Progressive Insurance (#120 in S&P in 2017). He joined Progressive in 2010 from PNC Financial Services Group. He was at NCB for many years and held many roles in IT and security including for 4 years as the anti money-laundering director. At Progressive, he is responsible for business continuity planning, physical security and the information security function.

Nick Chmielewski is responsible for managing the central region for Aon’s Cyber Solutions Group, which consists of 25 offices. Nick and his team are tasked with delivering cyber consulting services to current and prospective clients. His clients range from the middle market to some of the largest in the US. His work includes preloss cyber security work and assessments, testing cyber profiles and helping his clients manage risks, including in M and A transactions.

Chris Kakish is a Leader with Oswald Companies in the Professional Services Practice Group within the Property & Casualty Department. His current responsibilities include client consultation, stewardship, and oversight of the brokerage team responsible for the placement and negotiation of cyber liability coverage. His clients include financial institutions, private equity firms and professional service providers. Much of his work revolves around M and A transactions, usually in the middle market.

David Brown moderated.

3 Worries of the Panelists

  1. Security hygiene – lots of firms struggle with IT, keeping OS levels current, training employees in best practices for security, etc. The smaller the company, the more lax and vulnerable companies tend to be.
  2. Malicious code to mine bitcoin on your machines.
    1. If you are large enough to use the cloud, they can jump in on your place.
    2. Malicious intruders spend, on average, 190 days in a target’s systems.
  3. Risk management planning – vendors gaining access to you – how to qualify – vendors might have a bitcoin wallet – audience sees it as an IT issue – it is much more than that.
    1. General dos and don’ts of cyber training, prep.

Other Issues of Concern

GDPR – a lot of requirements for lots of people.

  1. If a EU business does work with you, you must comply
  2. See game companies not permitting use of their games in EU
  3. Lots of disclosures needed

M&A

  1. What is tech budget for an acquisition? Is it 5X systems & cybersecurity? Cyber budget is less than 10% normally, in M and A may be close to 20%
  2. Usually use a 3rd party – usually can’t do it before close,
  3. Want to cover in reps and warranties insurance if possible – underwriters look hard at it.
  4. New products or services – such as rep and warranty insurance

Other Notes From the Panelists:

Chris

1. Have to know where your data is located – is key

2. Audience sees it as an IT issue – it is much more than that – need risk management planning – vendors gaining access to you – how to qualify – vendors might have a bitcoin wallet

3. In M&A- reps and warranties insurance is important.

4. In M&A, average days in a system by a bad actor – may be up to 300 days

  1. Perfect time for bad guy to mine data from 2 companies
  2. Biggest example was the $300M cost in past 2 years

Nick

1. Phishing piece is big

2. Employee training is key – see in investigations

3. In M&A- see bad actors sit dormant in an environment

  1. Importance of cyber tools as part of due diligence
  2. What tools?

4. Integrations roadmap – for best practices

  1. How to assess?
  2. How to improve?

5. Cyber products have really changed

6. Reps and warranties

New cybersecurity products identified:

1. Bitsight

2. Splunk

3. Hopzero

Original Event Post:

Cybersecurity: Risks and Opportunities for Investors and Managers




M & A in the cybersecurity space picked back up where it left off at the end of 2017. The market is simultaneously expanding with VC investments into startups, and consolidating with large tech vendors acquiring pure-play cybersecurity companies. 19 significant transactions closed in March ’18. Cybersecurity spending will be over $100B this year.




Our panel of distinguished Cyber professionals will discuss the most important issues for investors and managers in an engaging and interactive session. They will discuss products, services and techniques used by business leaders to gain a competitive advantage in security.


The panel will also discuss cybersecurity issues and approaches in M&A due diligence.


This discussion will be a barnburner!


Who should attend? Owners, managers or advisors to businesses that have been cyber attacked or are at risk and, businesses that provide cybersecurity products and services. Also, investors in the cyber market place.


Please join us at the Cleveland Racquet Club. Check in and complimentary breakfast starts at 730a, Panel starts at 750a. This event is complimentary. Please register in advance. This event is the sixteenth in our series which started about 3 years ago. We have had more than 1,000 attendees including close to 100 at each of our past 2 events. If you like to learn, meet, eat and have fun, then join us.


Our panel includes:


Paul Beckwith is Chief Security Officer for Progressive Insurance (#120 in S&P in 2017). He joined Progressive in 2010 from PNC Financial Services Group.


Nick Chmielewski is responsible for managing the central region for Aon’s Cyber Solutions Group, which consists of 25 offices. Nick and his team are tasked with delivering cyber consulting services to current and prospective clients.


Chris Kakish is a Leader with Oswald Companies in the Professional Services Practice Group within the Property & Casualty Department.  His current responsibilities include client consultation, stewardship, and oversight of the brokerage team responsible for the placement and negotiation of cyber liability coverage.  


Moderator: David Brownco-Founder of the Center, provides advice on the acquisition, sale or restructuring of family or founder-owned middle market businesses.


Program Host: Ben Calkins leads The Calkins Law Firm. He is co-founder of the Center. 


Thank You to Our Sponsors!:


JP Morgan Private Bank: it is a leading provider of wealth management solutions and advice and is an important segment of JPMorgan Chase, the largest US bank and the 6th largest bank in the world. 



For more information about JP Morgan Private Bank’s services, please contact Greg KeeganVice President, Investment Specialist, Ken Greaney (216/781-2392) Vice President, Banker or John Arrowsmith, Managing Director, Investment Specialist.


The Calkins Law Firm is a premier boutique law firm that specializes in business law and focuses on business transactions and business disputes. Please contact Ben Calkins (440/796-4592).


Red Hawk Associates provides investment banking services to lower middle market businesses with a focus on founder or family owned firms. Please contact David Brown (216/464-8714).


Agenda


730a Continental Breakfast and Networking


750a Program


850a Adjourn


 FAQs


 Are there ID requirements to enter the event?


Pre registered guests only, please, due to space limitations.


 Is my registration/ticket transferrable?


Yes.


 Do I need to print and bring my paper event ticket?


No.


 Where can I contact the organizer with any questions?


Contact David Brown at [email protected] or 216/245-7879.


 How do I contact the professionals at JP Morgan Private Bank? 


For more information about JP Morgan Private Bank’s services, please contact Greg Keegan, Vice President, Investment Specialist, Ken Greaney (216/781-2392) Vice President, Banker or John Arrowsmith, Managing Director, Investment Specialist.

Venue

Organizer