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This is an important and timely read for companies thinking about ESG and cyber security. On the 15th of June 2021 the Securities and Exchange Commission charged US real estate services company First American Financial Corporation, with a failure of disclosure controls. Violating rule 13a-15(a) of the Exchange Act.
Why is this important? The charge relates to a failure of corporate governance. The First American was informed in 2019 by an external party that an application for sharing documents exposed over 800 million images, including PII. However when the company submitted a Form 8-K (unscheduled material events or corporate changes at a company that could be of importance to the shareholders or the SEC). Senior management were not appraised of certain information relevant to the disclosure response. Information security staff at the company new about the vulnerability months earlier, failed to fix the problem and report it to management.
¢â‚¬Å“As a result of First Americans deficient disclosure controls, senior management was completely unaware of this vulnerability and the companys failure to remediate it Charging First America under Rule 13a-15(a) of the Exchange Act.
In my opinion it’s a charge against an SEC covered entity for a failure of corporate governance relating to cybersecurity disclosure to the commission, one considered material to investors. Whilst the fine is small, the company wasn’t hacked and there is no evidence that data was lost.
With ESG front and centre is the SEC moving forward with ESG oversight and assurance for cyber?
Brian McCarthy Ted Dziekanowski Jason Spezzano
#cybersecurity‚Â #SupplyChainRiskManagement‚Â #CyberRiskManagement‚Â #riskmanagement‚Â #compliance‚Â #insurance‚Â #cyberinsurance‚Â #insurance‚Â #regulatorycompliance‚Â #regulatoryoversight‚Â #esgrisk‚Â #cyberregulation #corporategovernance
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