SEC Focus –
The Securities and Exchange Commission (SEC) has been focused on cybersecurity issues for over a decade, tracing back to its initial guidance on this topic in 2011. On October 16, 2018, the SEC released a report pursuant to Section 21(a) (15 U.S.C. § 78u) of the Securities Exchange Act of 1934, as amended (the Exchange Act) detailing its investigation of several public companies that were victims of cybersecurity-related frauds. See Release No. 84429, available here. While the SEC decided not to pursue enforcement actions against these companies, it emphasized the duty of a public company to comply with the requirements of Section 13(b)(2)(B) (15 U.S.C. § 78m) of the Exchange Act to devise and maintain a sufficient system of internal accounting controls.
Originally published in LexisNexis.
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