Current:Home > MyCyber breaches cost investors money. How SEC's new rules for companies could benefit all. -Wealth Axis Pro
Cyber breaches cost investors money. How SEC's new rules for companies could benefit all.
View
Date:2025-04-21 15:39:59
The U.S. Securities and Exchange Commission announced new rules yesterday requiring public companies to disclose cybersecurity incidents as soon as four business days.
SEC Chair Gary Gensler said the disclosure "may be material to investors" and could benefit them, the companies and markets connecting them.
“Currently, many public companies provide cybersecurity disclosure to investors. I think companies and investors alike, however, would benefit if this disclosure were made in a more consistent, comparable, and decision-useful way," he said.
The new rules were proposed in March 2022 after the SEC noted the increase in cybersecurity risks following the way companies pivoted toward remote work, moving more operations online, use of digital payments, increased reliance on third-party service providers for services like cloud computing technology, and how cyber criminals are able to monetize cybersecurity incidents.
What is the SEC cyber disclosure rule?
Under the new rules, companies are required to fill out the brand new 8-K form, which will have Item 1.05 added to disclose cybersecurity incidents. It will require disclosing and describing the nature, scope, and timing of the incident, material impact or reasonably likely material impact, including the financial condition and results of operations.
If the incident will have a significant effect, then the company has to report it in four days. But if the U.S. Attorney General deems the immediate disclosure a risk to national security or public safety, disclosure could be delayed.
The new regulation requires companies to describe their process assessing cybersecurity threats, how their board of directors oversee cybersecurity threats, and how management assesses the threat.
Foreign companies will use the amended 6-K form to disclose cybersecurity incidents and the amended 20-F form for periodic disclosure.
How much does a data breach cost a business?
In this year's "Cost of a Data Breach Report" by IBM Security, the average cost of a data breach in 2023 was $4.45 million, a 2.3% increase from 2022 when it was $4.35 million. The United States has lead the way for 13 consecutive years in highest data breach costs. This year, the Middle East, Canada, Germany and Japan also made up the top five countries with the most expensive data breaches.
During ransomware attacks, companies that excluded law enforcement paid 9.6% more and experienced a longer breach at 33 days.
Only one-third of the companies found data breaches themselves, while the rest were reported by the attackers themselves or by a third party. Among industries, health care had the highest data breach costs in the U.S. this year, followed by the financial, pharmaceutical, energy, and industrial sectors in order.
veryGood! (56)
Related
- FACT FOCUS: Inspector general’s Jan. 6 report misrepresented as proof of FBI setup
- 5 takeaways from AP’s Black attorneys general interviews about race, justice and politics
- Mexico’s minimum wage will rise by 20% next year, to about $14.25 per day
- Taylor Swift’s Rep Slams Joe Alwyn Marriage Rumors
- Tarte Shape Tape Concealer Sells Once Every 4 Seconds: Get 50% Off Before It's Gone
- Astronomers discover rare sight: 6 planets orbiting star in 'pristine configuration'
- Fed’s Powell notes inflation is easing but downplays discussion of interest rate cuts
- Authorities in Haiti question former rebel leader Guy Philippe after the US repatriated him
- New data highlights 'achievement gap' for students in the US
- Insulin users beware: your Medicare drug plan may drop your insulin. What it means for you
Ranking
- How to watch the 'Blue Bloods' Season 14 finale: Final episode premiere date, cast
- McCarthyism and queerness in 'Fellow Travelers'; plus, IBAM unplugged with Olivia Dean
- California sheriff’s sergeant recovering after exchanging gunfire with suspect who was killed
- Will Kevin Durant join other 30-somethings as NBA MVP?
- Why members of two of EPA's influential science advisory committees were let go
- Man pleads guilty to 2022 firebombing of Wisconsin anti-abortion office
- What’s streaming this weekend: Indiana Jones, Paris Hilton, Super Mario and ‘Ladies of the 80s’
- Balance of Nature says it is back in business after FDA shutdown
Recommendation
Selena Gomez engaged to Benny Blanco after 1 year together: 'Forever begins now'
UN ends political mission in Sudan, where world hasn’t been able to stop bloodshed
Felicity Huffman breaks silence on 'Varsity Blues' college admission scandal, arrest
Barbie’s Simu Liu Shares He's Facing Health Scares
US wholesale inflation accelerated in November in sign that some price pressures remain elevated
West Virginia places anti-abortion pregnancy center coalition at the helm of $1M grant program
Tony Award winner Audra McDonald announced as Rose Parade grand marshal
Katie Ledecky loses a home 400-meter freestyle race for the first time in 11 years