It’s the call that every general counsel dreads: “We’ve been hacked.” In the face of an increasing threat, cybersecurity preparedness and incident response have become top priorities for corporate boards and general counsel. Smart companies have prepared by implementing comprehensive written information security plans (to minimize the potential for a cyber incident) and incident response plans that are regularly exercised and updated in order to facilitate crisis management and decision-making in the hours, days and weeks once an incident occurs. This article focuses on how to comply with potential reporting and other disclosure obligations.
In the wake of a cyber incident, a general counsel is confronted with a flood of questions that must be answered quickly. What are our obligations under the patchwork of state, federal and international laws and regulations that may require reporting, especially if financial services or health information are impacted? What is the risk-benefit analysis of disclosing an incident to law enforcement? For public companies, another question is: What, if anything, do we have to disclose in our Securities and Exchange Commission (SEC) filings?
