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Josh Mooney Comments on Medidata Phishing Coverage Ruling

Law360
July 10, 2018

Josh Mooney, Co-Chair of the Cyber Law and Data Protection Group, weighed in on the Second Circuit's affirmation that Medidata Solutions Inc.'s crime insurer must cover a $4.8 million loss it suffered when its employees were tricked into wiring money by a crook posing as Medidata's president in an email. The three-judge panel of the appeals court agreed that Medidata's loss is covered under the computer fraud provision of its crime insurance policy.

Josh argues that the panel's ruling betrays a lack of understanding of how the fraudulent scheme against Medidata was carried out. "This case is a great example of why, for cyber claims, getting the court to understand the technology involved can be just as important as the coverage arguments themselves," he said.

He further reasoned that the definition of fraudulent entry was not met; because Medidata's inbox merely did what it was designed to do – receive incoming emails – the integrity of the computer system was not compromised. 

"The computer system was not tricked; the recipient of the email was tricked," he said.

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