Shostack + Friends Blog

 

$35M for Covering up A Breach

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"The remains of Yahoo just got hit with a $35 million fine because it didn't tell investors about Russian hacking." The headline says most of it, but importantly, "'We do not second-guess good faith exercises of judgment about cyber-incident disclosure. But we have also cautioned that a company's response to such an event could be so lacking that an enforcement action would be warranted. This is clearly such a case,' said Steven Peikin, Co-Director of the SEC Enforcement Division."

A lot of times, I hear people, including lawyers, get very focused on "it's not material." Those people should study the SEC's statement carefully.