SEC Charges Issuer With Cybersecurity Disclosure Controls Failures

According to the SEC’s order, on the morning of May 24, 2019, a cybersecurity journalist notified First American of a vulnerability with its application for sharing document images that exposed over 800 million images dating back to 2003, including images containing sensitive personal data such as social security numbers and financial information.  In response, according to the order, First American issued a press statement on the evening of May 24, 2019, and furnished a Form 8-K to the Commission on May 28, 2019.  However, according to the order, First American’s senior executives responsible for these public statements were not apprised of certain information that was relevant to their assessment of the company’s disclosure response to the vulnerability and the magnitude of the resulting risk.  In particular, the order finds that First American’s senior executives were not informed that the company’s information security personnel had identified the vulnerability several months earlier, but had failed to remediate it in accordance with the company’s policies.  The order finds that First American failed to maintain disclosure controls and procedures designed to ensure that all available, relevant information concerning the vulnerability was analyzed for disclosure in the company’s public reports filed with the Commission.

Source: SEC.gov | SEC Charges Issuer With Cybersecurity Disclosure Controls Failures