Yahoo Inc. is reportedly being probed by the U. S. Securities & Exchange Commission (SEC), as federal authorities are trying to determine whether the beleaguered internet company should have reported its two massive data breaches sooner to investors.
Speaking on the condition of anonymity, a person, claiming familiarity with the matter, revealed that SEC opened an investigation and demanded the company to submit certain documents in December.
Federal investigators are trying to determine whether Yahoo's disclosures of the massive data breaches or cyberattacks violated the nation's civil securities laws.
Yahoo's case appears to be unusual because it is not just about data breach as it may blow up a huge acquisition deal. In July last year, Yahoo agreed to sell its core business to telecommunications giant Verizon Inc.
John Reed Stark, a cybersecurity consultant who once operated SEC's office of internet enforcement, said, "Here you are talking not just about the potential for a data breach, but a deal blowing up because of a data breach … In my 20 years at the SEC, I never referred a disclosure case to a prosecutor."
Meanwhile, Yahoo is widely expected to report its fourth-quarter earnings this Monday (Jan. 23rd), after the market closes. However, the company won't hold a conference call with industry analysts.
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