In the preceding September, the top-tier gaming and entertainment firm, MGM Resorts International, had a run-in with cyber criminals. A group of hackers thought to be from the “Scattered Spider” group staged a cyberattack, leading to operational disturbances for about seven days. The fallout felt at a local level revolved around unavailability of certain services and inconvenience to MGM guests. However, globally, it equated to a hit of around $10 million in one-time expenses paired with a $100 million downturn in MGM’s Q3 2023 earnings.
Responding to this cybersecurity breach, in the following January, the Federal Trade Commission (FTC) issued a Civil Investigative Demand (CID), necessitating a handover of relevant data and documents about the incident. This demand was broad in scope, requiring not only details related to the cybersecurity breach but crucial information not directly tied to the incident. Subsequently, in February, MGM tried to annul the CID, dismissing its request as invalid.
In the ongoing face-off between the FTC and MGM, the gaming giant chose to escalate the matter to court. It filed a Complaint for Declaratory and Injunctive Relief against the Commission, including FTC chair Lina Khan.
Renowned Gaming Firm Accuses of Fifth Amendment Rights Violation
Through the lawsuit, MGM disclosed how the incident had effectively rendered its IT systems inoperative. The lawsuit reportedly mentioned that during the cyberattack, when MGM’s systems were compromised, Khan and an unidentified senior aide were staying at an MGM property in Las Vegas. At this time, Khan was allegedly requested to write her credit card details on a sheet of paper.
Shortly following this incident, the FTC served CID in January. MGM countered that the CID was based on two financial services regulations, neither of which is relevant to MGM. The legal claim from MGM read, “Invoking Section 5 of the FTC Act, the FTC seeks to force MGM to disclose over 100 categories of information.”
“The Fifth Amendment’s Due Process Clause ensures those undergoing government enforcement actions a fair hearing before an unbiased tribunal and equal treatment under the law. MGM raises this lawsuit to oppose actions by the FTC, its Chair, and FTC regulations that have stripped and continue to strip MGM of these basic rights.”
MGM Resorts’ legal claim
Crucially, the gaming conglomerate asserted a violation of its Fifth Amendment rights, implicating the participation of Khan and her denial to recuse herself in spite of MGM’s request. Alongside this, MGM expressed its concern over FTC’s refusal to disqualify its chair in disregard of her personal involvement in the underlying subject of the investigation, thereby infringing on MGM’s Fifth Amendment rights.
The premier gaming and entertainment company reaffirmed its ongoing collaboration with the Federal Bureau of Investigation in their efforts to bring the cyber criminals to justice.
