Your employment contract, generally otherwise worthless in most cases, should contain a hold harmless clause -- make sure it does. If you have any doubt, you might consider paying an attorney to review your employment contract and advise you about the applicable statutes. If you consult with an attorney, keep it secret (even from your cow-orkers) so you don't prompt an overreaction from your employer.
IANAL, but: Assuming you're adequately protected by a hold harmless clause, you should be covered unless you do something you know or should know is illegal. Ethics might be personally bothersome, but any legal liability for unethical conduct falls upon your employer as long as you personally don't break the law.
If you were a third party (consultant|contractor) I'd suggest walking away from the project if the security specifications don't fall within your risk acceptance comfort zone. If you were a third party, you would have to meet a much higher standard in order to maintain the legal shield, because your client would be considered to be "acting in reliance upon your professional judgment". It's generally not a defense to show that you had to choose between doing a stupid thing and losing the contract.
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