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Altaba Inc/Yahoo SEC Enforcement Action Reminds to Know Vendor Response Plan

4 min read
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A few weeks ago, on April 24, 2018, the Securities and Exchange Commission (SEC) fined Altaba, Inc., aka Yahoo, $35 million for a massive data breach that impacted around 50 million users in 2014 

In 2014, Altaba became aware of the data breach that gave access to personal information such as birth dates, email addresses, phone numbers and encrypted passwords, but failed to notify investors and the public until two years later.  

This SEC cybersecurity penalty impacts the company shortly after the recent update in SEC priorities and reinforces the agency’s focus on cybersecurity disclosure obligations.  

Know Your Vendor’s Incident Response Plan 

This breach reminds us how important it is to always fully understanding your vendor's incident response plan and their breach notification procedures. Understanding how quickly they will notify you, should a breach occur, is one of the most crucial steps in designing your own incident response. When theres not a clause in the vendor’s incident response plan or your Service Level Agreement (SLA) regarding notification of a breach, its quite possible that you will not be alerted in a timely manner, like the scenario we see here.  

Not being promptly alerted can lead to the breach being made public by the vendor, or another source, long before your institution is even notified. Typically, if this happens, your institution will no longer have ample time to remediate the breach and implement your incident response for your customers/members. This delay can lead to a loss of trust and, ultimately, the loss of trust can lead to a loss of business, which no institution wants.  

In order to ensure you can properly plan and implement your institution’s response to a breach, ensure you require that your vendor provide their cybersecurity incident response plan the next time youre in the vendor vetting selection phase or performing your annual ongoing monitoring due diligence reviews

In addition to checking out a vendor's cybersecurity incident response plan, do you know the other areas of cybersecurity you should be paying attention to? Download our infographic

Regulatory Developments Impact Your Next Vendor Management Exam eBook

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