Scott & Scott LLP Offers Statement in Response to TJX Cos Data Breach.

DALLAS -- TJX Cos, operator of TJ Maxx and Marshall's discount stores, disclosed today a data security breach potentially compromising customer information in the U.S. and Puerto Rico, and possibly the U.K. and Ireland. In response, Scott & Scott, the Dallas-based legal and technology services firm specializing in privacy and network security, takes this opportunity to remind businesses that there is no such thing as a completely secure network. Businesses must implement proactive processes and controls to minimize the risks of legal liability and damage to the corporate brand as a result of a data security breach.

Every business utilizing electronic data is at risk of a data security breach, largely as a result of several common factors:

* E-mail: 75-95% of all corporate e-mail traffic is dangerous. Any employee who opens a personal e-mail at work can download a virus, leaving the network highly vulnerable to data security breaches.

* Mobile Devices: The dramatic increase in the use of laptops and personal digital assistants puts enterprises at significant risk of a security breach, because the equipment is often lost or stolen.

* Employees: One-third of all employees steal from their employers; included in this statistic is the theft of corporate information.

* FTP (File Transfer Protocol): While FTP sites offer convenient remote access to files, they also provide the most direct route into a server. Carelessness can disable an entire network in seconds.

As a security measure, Scott & Scott recommends that companies equip every electronic device containing confidential information with desktop security protection, including proper authentication and encryption technology. In addition to safeguarding information, in many states encrypting data eliminates the requirement for companies to alert their customers in the event of a data security breach. Maintaining confidentiality can significantly reduce the risk of potentially catastrophic business and public image implications that are associated with legally required breach notifications.

This most recent incident of data security breach, also reiterates the need for companies to consider investigating and purchasing insurance coverage for potential corporate security failures, such as a data security breach. Many forward-looking insurance providers have recognized the need for network security insurance coverage and are offering a variety of types, including inside job coverage, service provider coverage, employee claimant coverage, regulatory coverage and third-party handling coverage.

Because nothing is failsafe, even the select businesses that have implemented the most aggressive encryption, firewall and authentication technologies are well advised to consider obtaining data security and privacy insurance to help mitigate the financial risks of a network security breach. Of the estimated 75% of companies that are less prepared, they should strongly consider insurance as a first step to protecting their valuable enterprise."

Editor's Note:

An expert in privacy and network security, Julie Machal-Fulks vigorously represents Scott & Scott's clients on all issues pertaining to network security, software compliance, and audit defense. She has co-authored numerous articles addressing the legal, financial, and regulatory risks associated with network security breaches, including her article entitled "Privacy, Network Security, and the Law," on which she is often asked to present. Julie graduated with honors from Texas A&M - Corpus Christi, earning a B.A. in English. She received her law degree from The University of Houston Law Center, where was a member of the Order of the Barristers and served on the Executive Board of Advocates in 1998, 1999, and 2000. Julie is admitted to practice before all Texas State Courts.

About Scott & Scott LLP 

Scott & Scott is a leading national law and technology services firm dedicated to helping senior executives assess and reduce the legal, financial, and regulatory risks associated with information technology issues. An innovative approach to legal services, Scott & Scott believes that collaboration between legal and technology professionals is necessary to solve and defend against the complex problems our clients face, including privacy and network security, IT asset management, software license compliance, and IT transactions. Legal and technology professionals work in tandem to provide full-service representation. By combining these resources, Scott & Scott is better able to serve clients' needs than law firms and technology services firms working independently of one another. Visit us on the web at www.scottandscottllp.com.