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A great and comprehensive article from the Harvard Law School Forum on Corporate Governance Faisal Khan, following the latest court tussle between the SEC and SolarWinds (15th May 2024). A case that is ‘a first-of-its-kind action asserting fraud and internal controls charges against a company and its CISO’, one that will set further legal precedence for the SEC.
The article balances both sides of the legal action between the SEC and SolarWinds. In what one has described previously as a ‘bring the popcorn’ legal encounter. That evaluates the courts response to both sides arguments, ahead of the courts response to the 15th of May hearing. The article also lays out key takeaways based on the SECs first salvo into this first-of-its-kind case.
Namely
1. If successful the SEC will bring cases against public companies and their CISOs that assert fraud and internal accounting controls charges in the wake of a breach.
2. Companies and CISOs need be cautious how they describe cybersecurity and risk. Consult with counsel who are familiar with cyber-risk management to minimize exposure.
3. Companies and CISOs need to be aligned over governance. The CISO had disclosure obligations that the companies board should have been aware, as it attested security compliance to regulators.
The outcome of the motion are far from clear however companies and CISOs should be careful about their cybersecurity disclosures. Veritas GRC we work with legal and audit professionals, creating governance programs to support companies through reasonable and adequate compliance to cybersecurity regulation. Cybersecurity risk management regulatory compliance is a legal, cyber, risk, compliance program requiring board governance to oversight, assure and attest compliance.
@Thaddeus Dziekanowski Brian D. McCarthy Rachel V. Rose, JD, MBA Ryan Buckner
SolarWinds U.S. Securities and Exchange Commission
#cybersecurity #cyberriskmanagement #cyberregulation
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