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 there’s not a clause in the vendor’s incident response plan or your Service Level Agreement (SLA) regarding notification of a breach, it’s 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 you’re in the vendor vetting selection phase or performing your annual ongoing monitoring due diligence reviews.