Search Site

The SEC’s Groundbreaking Settlement with Yahoo

On April 24, the Securities and Exchange Commission (SEC) announced a settlement with the Altaba, Inc., formerly known as Yahoo! Inc., worth $35 million. The figure settled charges that the company deliberately misled investors by waiting a full two years to release information about a data breach that resulted in hackers gaining access to personal data connected to 500 million user accounts.

The settlement is a groundbreaking moment, as it’s the first time the SEC has ever initiated a cyber-disclosure enforcement action against a public company. This sheds some interesting light on how the SEC views the cybersecurity disclosure obligations of these companies and gives large corporations a greater idea of what’s expected out of them.

What to take away from the case

By showing a focus on cybersecurity, the SEC demonstrates its overall commitment to safety on the internet. The ruling in this case emphasizes that if a company becomes aware of a significant data breach, disclosing the possible risk of an attack could be misleading to its investors. Still, the order does not require immediate public disclosure of all data breaches.

In the SEC’s 2018 Guidance, it said “a company may require time to discern the implications of a cybersecurity incident,” but that “an ongoing internal or external investigation — which often can be lengthy — would not on its own provide a basis for avoiding disclosures of a material cybersecurity incident.”

Therefore, there is still an element of good faith left to companies with regard to how they operate in data breach situations. These companies can use their best judgment with how to proceed in a situation and the type of response they issue. But if the way they proceed misleads investors or harms consumers, the SEC will come down on them hard.

For more information on the effect of this SEC settlement with Yahoo, meet with a skilled Dallas whistleblower 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.