SolarWinds hackers could have been halted by simple security measure – report

Meanwhile the US Securities and Exchange Commission (SEC) has opened a probe into the breach, focusing on whether some companies failed to disclose that they had been affected by the unprecedented hack, two persons familiar with the investigation said.

The SEC sent investigative letters late last week to a number of public issuers and investment firms seeking voluntary information on whether they had been victims of the hack and failed to disclose it, said the persons, speaking under the condition of anonymity to discuss confidential investigations.

The agency is also seeking information on whether public companies that had been victims had experienced a lapse of internal controls, and related information on insider trading.

The agency is also looking at the policies at certain companies to assess whether they are designed to protect customer information, one of the people said.

The SEC’s press office declined to comment.

A spokesperson for SolarWinds said in a statement: “Our top priority since learning of this unprecedented attack by a foreign government has been working closely with our customers to understand what occurred and remedy any issues.”

The company was also “collaborating with government agencies in a transparent way,” the statement said.

US securities law requires companies to disclose material information that could affect their share prices, including cyber breaches, although cyber security disclosure failures are still relatively new enforcement territory for the SEC.

If the issuers and investment firms respond to the letters by disclosing details about the breaches, they would not be subject to enforcement actions related to historical failures, including internal accounting control failures, the people said.

While the letters are focused on the SolarWinds breach, the SEC may develop future policies on the impact of cyber security issues on the markets and on investors, the people said.

REUTERS