MGM Seeks to Block FTC’s 2023 Cyberattack Investigation with Lawsuit

In September, MGM Resorts International, the leading gaming and entertainment company, fell victim to a group of hackers. The actions of the suspected “Scattered Spider” group resulted in disruptions in the company’s operations for approximately one week. The local impact was related to missing amenities and inconvenience created for MGM guests. But the wider impact was approximately $10 million in one-time expenses in combination with some $100 million dip in MGM’s Q3 2023 earnings.

In light of the cyberattack against the company, in January, the Federal Trade Commission (FTC), filed a Civil Investigative Demand (CID), requesting data and documents related to the incident. Besides related data, the CID required additional information that wasn’t connected in any way to the cyberattack. After that, in February, MGM attempted to quash the CID, claiming the request was invalid.

In the latest chapter of the saga between the FTC and MGM, the gaming operator decided to take the matter to court, filing a Complaint for Declaratory and Injunctive Relief against the Commission and its chair, Lina Khan.

Gaming Giant Claims Violation of Fifth Amendment Rights

In the legal claim, MGM described the incident that ultimately incapacitated its IT systems. The gaming and entertainment company included media reports, revealing that Khan, along with “an unnamed senior aide” happened to be guests at one of its Las Vegas properties. The visit happened during the cyberattack and reportedly, while MGM’s systems were down, Khan was asked to write her credit card details on paper.

It wasn’t long after that, when in January, the CID from the FTC was filed. “FTC’s purported legal justification for the CID is two financial services regulations, both of which are facially inapplicable to MGM. On this basis, and a catchall invocation of Section 5 of the FTC Act, the FTC seeks to compel MGM to produce more than 100 categories of information,” wrote MGM in its legal claim.

“The 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. 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 rights,“

reads MGM Resorts’ legal claim

More importantly, the gaming operator claimed that its rights under the Fifth Amendment were violated. This comes in light of the involvement of Khan and her refusal to recuse herself from the case despite MGM’s request. The company was also concerned about the FTC’s refusal to disqualify its chair “despite her personal involvement in the subject matter of the investigation, flies in the face of applicable case law and deprives MGM of its rights under the Fifth Amendment.”

The leading gaming and entertainment operator reaffirmed that it continues to collaborate with the Federal Bureau of Investigation to help bring the people behind the cyberattack to justice.