A report from the U.S. Securities and Exchange Commission last fall warned that publicly held companies with insufficient internal accounting controls are more likely to cause cyber fraud and could be in violation of federal law and subject to future fines from the SEC. This indicates the agency is looking to crack down even further on instances of cyber fraud across a variety of business sectors in the United States.
The report, which came out in mid-October 2018, came shortly after the announcement of a $1 million settlement in a case that involved an investment firm failing to sufficiently follow sound cyber security procedures and poorly handling a resulting cyber breach.
The SEC’s report focuses on a couple primary types of cyber crimes: emails from fake vendors and emails from fake executives. It included examples from nine different companies. Although the agency decided not to pursue enforcement actions against any of those nine companies, it did want to use them as examples to educate other businesses and organizations about the cyber-related threats they face on a day-to-day basis, especially with regard to their electronic communications.
To ensure your electronic data is secure and that your company is not doing anything that could make a breach more likely, it’s important to make cyber security a point of emphasis in your operations. All employees should be trained in at least basic cyber security practices and should be educated about the most common scams and other forms of digital fraud.
For more information on the legal implications of cyber fraud in your organization and your responsibility to avoid breaches and data theft, meet with an experienced attorney at Kardell Law Group.