06 May 2018

US Corporate Law News: Yahoo to pay SEC $35 million fine over failure to disclose data breach


Flora Tsui
Associate | US

On April 24, 2018, the SEC announced that Altaba Inc., a holding company for Yahoo's investment in Alibaba, agreed to pay a $35 million fine to settle charges that it failed to timely inform investors about a large-scale data breach that took place in late 2014. The SEC claimed that Yahoo had failed to properly investigate the breach's circumstances and adequately assess whether the breach needed to be disclosed to investors after learning that Russian hackers had stolen important information including usernames, email addresses, encrypted passwords and security questions for hundreds of millions of user accounts. Yahoo had only revealed the breach after reaching an acquisition agreement with Verizon in July 2016. The SEC's decision to order such fine against Altaba shows the SEC's determination to ensure that public companies have effective controls and procedures in place to timely discharge their cyber-disclosure obligations concerning material information to investors. For more information, see https://www.sec.gov/news/press-release/2018-71.

Flora Tsui Associate | New York