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Senator! calls! for! SEC! probe! to! be! inserted! into! Yahoo!

More bad news for the Purple Palace

By John Oates, 27 Sep 2016

A US Senator is calling on the Securities and Exchange Commission to join the queue to administer a kicking to Yahoo!.

Yahoo! has admitted hackers accessed about 500 million of its email accounts.

The announcement came last week, but the actual hack happened back in 2014.

Democrat Senator Mark Warner, who sits on the Senate’s Banking Committee, has written to the SEC calling on it to investigate whether Yahoo! fulfilled its obligations under federal securities law to fully inform the public and investors about the nature of the breach.

Warner said in a statement:

Data security increasingly represents an issue of vital importance to management, customers, and shareholders, with major corporate liability, business continuity, and governance implications.

Yahoo’s September filing asserting lack of knowledge of security incidents involving its IT systems creates serious concerns about truthfulness in representations to the public. The public ought to know what senior executives at Yahoo knew of the breach, and when they knew it.

Warner added that since Yahoo! was in talks to sell its business to Verizon, it should have also have told them about the breach.

Yahoo! filed a proxy statement on 9 September which stated: “To the knowledge of Seller, there have not been any incidents of, or third party claims alleging, (i) Security Breaches, unauthorized access or unauthorized use of any of Seller’s or the Business Subsidiaries’ information technology systems.”

Warner called for a thorough investigation into what Yahoo! knew and when about the security of its IT systems. He further said that since only 100 of 9,000 listed companies have ever reported a material breach, the SEC should look at strengthening its own rules.

US law gives listed companies four days to make public any serious data breach.

Yahoo! is already facing a class action lawsuit from aggrieved lawyers, customers in California.

Warner’s full statement is available here. ®

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