Page 42 - Cyber Defense eMagazine October 2023

Review the 23 entity types (including SEC-reporting companies, insurance companies, tax-exempt
companies or subsidiaries of exempt entities) which are exempt from the definition of reporting
companies under the CTA. Consider the ease of access to certain entity data within your state’s database
(if applicable), and prevalence of personally identifiable information (PII) available on BOs/senior officers
within the organization.

Understand the penalties of noncompliance. According to the legislation, failure to comply or the provision
of false or fraudulent reports may result in civil fines of $500 a day for as long as the reports remain
inaccurate. Failure to comply may also subject the violators to the criminal penalties of a $10,000 fine or
2 years in jail.

Review the intricacies of access and compliance regulations in each state, especially organizations with
multiple areas of operation. As mentioned above, in New York’s case, BO information may be accessible
through means that are not applicable in other regions of the United States.

Don’t wait; seriously consider getting ahead of the process and compiling reporting information now.
Update internal policies to streamline report information gathering and create a system to continuously
track and update upcoming changes to reporting information.

Consult with legal counsel on the upcoming changes, privacy consultants, and PII removal services to
further mitigate risks posed by the availability of personal data on the open web.

Takeaways from the CTA

While the Corporate Transparency Act takes a significant step toward greater financial transparency and
accountability, it doesn’t come without trade-offs. As we continue to grapple with the complexities of
privacy in an increasingly interconnected world, the act serves as a timely reminder of the delicate
equilibrium that must be maintained between transparency and privacy.

About the Author

Tom Aldrich, VP Private Clients, 360 Privacy: Tom joined 360 Privacy as a
Partner after having worked at Goldman Sachs as a private wealth advisor. He
came to Goldman from the US Army, where he served as a Green Beret and
functioned as both a communications and intelligence subject matter expert.
He deployed overseas four times, where he was responsible for tactical and
strategic targeting, intelligence, and digital exploitation. Tom is a Certified
Ethical Hacker and obtained his CIPP/US Certification from the International
Association of Privacy Professionals.

Cyber Defense eMagazine – October 2023 Edition 42
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