Thank you for sharing Ted Dziekanowski. Defining materiality as seen by a reasonable shareholder will be an important definition for SEC covered

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Thank you for sharing Ted Dziekanowski. Defining materiality as seen by a reasonable shareholder will be an important definition for SEC covered registrants. As the final rule documents, the basis for defining material should be consistent with that set out in cases addressing materiality in securities laws, including TSC Industries, Inc. v. Northway, Inc., Basic, Inc. v. Levinson, and Matrixx Initiatives, Inc. v. Siracusano.

Setting the starting point from which a registrant can identify material effects of an incident and material cyber risks. Interestingly the SEC also identifies that the effects of materiality may not just be short term, but longer term considerations of brand reputation and customer impact (for example).

A further consideration is ‘adequacy’ and what constitutes adequate compliance to the SEC rule. Our paper this week will discuss this in more detail.

Rachel V. Rose, JD, MBA Bob Dix

#cybersecurity #cyberriskmanagement #cyberregulation #securitiesandexchangecommission

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