Releases

With identity theft and online fraud rapidly increasing, federal legislators are urging the SEC to require public companies to disclose any instances or attempts to breach corporate data. The Senate's Commerce Committee also wants corporations to regularly disclose corporate efforts to reduce security risks and prevent cyber attacks. "Many companies are understandably reluctant to reveal failed data breaches, believing that disclosure will actually increase their vulnerability," says William Katz of Dallas' Thompson & Knight. "There's also a healthy fear that disclosures can negatively affect the value of a company's stock. However, these requirements are likely to be politically and publicly popular, so companies should begin planning for their adoption." A 2009 study found that 38 percent of Fortune 500 companies did not mention privacy or data security exposures in their annual 10-K filings, and only 7 percent of public companies fully encrypted their confidential data. For information, contact Barry Pound at 800-559-4534 or barry@androvett.com.