MGM Resorts sues FTC over cyberattack investigation Casinos Gaming Business

pThe Las Vegas company says FTC Chairwoman Lina M Khan has a conflict of interest because she personally experienced the September cyberattackppMGM Resorts International filed a lawsuit Monday against the Federal Trade Commission and its top officer Chairwoman Lina M Khan claiming the agency violated the companys Fifth Amendment right to due process while investigating a September cyberattack against the companyppIn the fourcount action MGM also alleges the FTC failed to follow its own conflictofinterest guidelinesppThe lawsuit filed in US District Court for the District of Columbia seeks an injunction to stop the FTC from seeking a civil investigative demand in its investigation of MGM related to the cyberattack unless Khan disqualifies herself from the matter The demand is an administrative subpoena that allows federal agencies to request large amounts of information from private companies without going through court proceduresppThe Due Process Clause of the Fifth Amendment affords parties subject to government enforcement actions a fair hearing before an impartial tribunal and guarantees them equal treatment under the law the lawsuit states MGM brings this case to challenge actions by the FTC and its Chair and FTC regulations that have deprived and continue to deprive MGM of these fundamental rightsppA representative of the FTC on Monday said the agency had no comment about the lawsuitppThe lawsuit alleges Khan and a senior aide have a conflict of interest because they were guests at the MGM Grand on Sept 12 as the cyberattack which cost the company an estimated 100 million was unfolding last yearppMGMs misfortune that day was compounded by the presence of a powerful public figure at its Las Vegas hotel during the attack the lawsuit statesppMGM said the publicity of Khans experience triggered 15 consumer classaction lawsuits against MGM The company wants Khan disqualified because she could be a witness in the matterppMGM also has asked the court to find the FTCs rules on recusal unconstitutional and rule the company isnt a financial institution and therefore shouldnt be subject to the FTCs rules for them related to identity theft and keeping customer information safeppRules and markersppThe FTC considers MGM subject to those rules because the company issues markers to highrolling gamblers Gambling with markers represents a small percentage of casino play and gaming companies say its the equivalent of a gambler playing on a tab and not on creditppThe lawsuit also seeks a reasonable deadline to file the CID if the FTC is allowed to continue its investigation The company wrote a letter to the agency unsuccessfully seeking a deadline extension because the agency is asking for the production of more than 100 different categories of information spanning multiple years MGM believes much of the information sought is irrelevant to the cyberattack according to a letter sent to the FTC in FebruaryppThe lawsuit also seeks reimbursement of court costs and other damages the court identifiesppMGMs computer systems were attacked in September by hackers seeking a ransom payment At the direction of federal investigators MGM refused to pay the ransom During the cyberattack hundreds of slot machines were inoperative guests could not access their rooms with smartphones and creditcard payment systems were disrupted leading to the manual processing of creditcard transactionsppAmong the guests were Khan and an aide who were in Las Vegas for a conferenceppOn Sept 15 Bloomberg reported Khan and the aide questioned MGMs procedures during the cyberattackppWhen Khan and her staff got to the front of the line an employee at the desk asked them to write down their credit card information on a piece of paper the lawsuit said citing the Bloomberg report As the leader of the federal agency that among other things ensures companies protect consumer data wrote down her details Khan asked the worker How exactly was MGM managing the data security around this situation The desk agent shrugged and said he didnt know according to a senior aide who was traveling with Khan and described the experience to Bloomberg as surrealppCID filed in JanuaryppFour months later on Jan 25 the FTC filed its civil investigative demandppTo MGM the information requested mirrored Khans experience in Las VegasppThe voluminous requests posed by the CID closely track the events involving Chair Khan with certain requests seemingly derived directly from Chair Khans personal experience in transacting business with MGM during the attack the lawsuit statesppMGM had telephone conferences with the FTCs Los Angeles field office in the weeks ahead and on Feb 20 MGM filed a petition to quash or modify the CID The company was given 11 days to compile the requested datappThe company then filed a petition seeking the recusal of Khan from the proceedingsppOn April 1 the commission issued a single order denying both petitions The commission said its Rules of Practice do not allow the recusal of commissioners except from administrative litigationppThis categorical refusal to hear petitions to recuse or disqualify even in extreme cases like this one violates the Due Process Clause of the Fifth Amendment the lawsuit statesppContact Richard N Velotta at rvelottareviewjournalcom or 7024773893 Follow RickVelotta on XppA Sunday afternoon computer system outage at multiple MGM Resorts International properties was because of an internal issue company officials saidppBoyd Gaming has moved away from plans to build within the Henderson masterplanned community but it is eyeing redevelopment at the adjacent Jokers WildppThe woman was a guest at Paris hotelcasino when her Range Rover was stolen She claims gross negligence against the companyppA sixpage letter from activist investor Will Wyatt to Penn Entertainments board of directors is reverberating through the regional casino market and Boyd GamingppThe Las Vegas casino operators new partnership with Playtech will enable 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