Energywire Quotes Michelle Reed on Energy Companies Disclosing Cyber Breaches
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Energywire has quoted Akin Gump partner Michelle Reed, co-leader of the firm’s cybersecurity, privacy and data protection practice, in the article “SEC sounds cyber ‘wake-up call’ to public companies.” The story follows a recent move by the SEC to penalize Altaba Inc., formerly known as Yahoo Inc., $35 million for failing to disclose to investors for two years a large cybersecurity breach that affected hundreds of millions of its users.
The article reports that major energy companies have drawn a sharp line between a “material” breach and more mundane attempted cyber intrusions, while still opting to disclose the latter to investors. Reed said the harm that can befall energy companies may make them more inclined to disclose their cybersecurity risks.
“Companies should be considering very closely what systems they have in place to identify even the small breaches to make sure that it isn’t laying a predicate for a future breach of more devastating consequences,” Reed said.
Reed added that, while she expects the “trickle of disclosures” to tick up following the Yahoo/Altaba enforcement action, she warned against going overboard with new reporting. “Companies should be aware of concerns related to burying disclosures: courts have recognized the harm that can be caused to investors by an ‘avalanche of trivial information,’” she said.
