Yesterday, the Securities and Exchange Commission (SEC) announced an important administrative settlement with Altaba (Yahoo) related to the company’s failure to disclose a major security breach to its users and investors. Under the terms of the settlement, the company agreed to pay a $35 million civil money penalty to settle charges that it misled investors by failing to disclose one of the world’s largest data breaches in which hackers stole personal data relating to hundreds of millions of user accounts. Continue Reading Yahoo Settles Claims by SEC regarding 2014 Data Breach
Yahoo agreed to pay shareholders $80 million to settle a federal securities class action suit, as detailed in the parties’ March 2, 2018 proposed settlement agreement filed with the court. In that suit, the shareholders claimed that Yahoo failed to disclose a number of data breaches affecting more than 3 billion users, which caused Yahoo’s stock prices to fall. One of the named plaintiffs is not participating in the settlement. This was one of the first federal securities lawsuits arising out of a data breach. Several others have followed. If the court approves the settlement, it will be the first recovery in a shareholder lawsuit based on a data breach and certainly will encourage other such suits in the future.