Search Site

Do Disclosures to the SEC About Cybersecurity Qualify for Whistleblower Awards?

Since the establishment of the SEC’s Whistleblower Program in 2011, there have been some occasional questions as to the scope and limitations of the federal agency’s ability to grant awards to whistleblowers. For example, do disclosures to the SEC about cybersecurity qualify for whistleblower awards?

A recent enforcement action taken against Voya Financial Advisors, Inc. (VFA) answered this question with a “yes.” VFA will pay $1 million to settle charges that it did not do enough to protect information about advisory clients and brokerage customers.

Issues behind the settlement

VFA’s standard modus operandi was to provide independent contractor representatives (which make up the majority of its workforce) access to personal customer information through its own web portal, which could be accessed from personal devices so long as they had an internet connection.

However, during six days in April 2016, multiple unknown people gained access to this web portal by impersonating VFA representatives and calling the technical support line to reset their passwords. After the passwords were reset, the people posing as VFA contractors were able to get temporary passwords, giving them access to personal information of thousands of customers.

Furthermore, after the breach occurred, VFA did not address the deficiencies in its cybersecurity that allowed this to happen. According to reports, one adviser alerted VFA that he had not requested the new password that was put on his account, but more advisers were still impersonated after this official report.

With how much business is done online and remotely these days, it’s crucial for companies to do everything they can to protect confidential information. For further information on the SEC’s whistleblower program, meet with a skilled attorney at Kardell Law Group.

Awards & Honors
Our Office
  • Dallas Office
    4514 Cole Ave
    Dallas, Texas 75205
    Phone: 214-306-8045
    Fax: 469-729-9926
As Seen In
In his new book, "Standing Up to China: How a Whistleblower Risked Everything for His Country," former client & Author, Ashley Yablon, quotes Attorney Steve Kardell about Whistelblower Law.
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Incredible knowledge of employee related concerns and equally brilliant knowledge of health care regulations, standards of practice. I would recommend this firm to anyone."  -V.B.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.