Should Yahoo's Major Data Breaches Have Been Reported Earlier to Investors?

The Wall Street Journal is reporting that the SEC (Securities and Exchange Commission) has opened a probe into Yahoo Inc. The subject of the investigation? Yahoo's two massive data breaches and whether or not the breaches should have been reported to investors earlier.

In 2016, Yahoo! revealed that they had been the victim of two major data breaches - one in 2014, and another in August of 2013. These two hacks were some of the biggest in the history of the Internet.

Verizon, which had already agreed to purchase Yahoo's core business prior to the news of the breaches being released, was understandably not happy about the revelations. The two breaches did considerable damage to Yahoo's brand and it was thought that Verizon might try to negotiate a lower price for Yahoo! or walk away from the deal altogether.

Verizon hasn't made any announcement one way or another, though it is thought that they will be moving ahead with the deal, despite the two breaches.

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The SEC will reportedly be investigating whether or not Yahoo! was in compliance with civil securities laws. According to the Wall Street Journal, "the SEC requires companies to disclose cybersecurity risks as soon as they are determined to have an effect on investors".

Did these breaches require a disclosure to investors? To the casual observer, the answer would probably be "yes", though Yahoo's lawyers will obviously argue otherwise.

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Marissa Mayer's exit from Yahoo! is not going as she had probably hoped.

Earlier in the month, Mayer announced that she would be leaving Yahoo! following the conclusion of the sale of Yahoo's core business to Verizon. Instead of focusing on winding down operations, Mayer has had to deal with the continued fallout of Yahoo's two major data breaches.

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It will be interesting to see if Verizon makes any official statement following this weekend's revelation of the SEC's investigation into Yahoo!

Source: WSJ.com - Yahoo Faces SEC Probe Over Data Breaches

Filed under: General Knowledge