In a curious twist of fate, the American banking and financial industry advocacy groups have taken it upon themselves to beseech the Securities and Exchange Commission (SEC) to cast aside its pesky cybersecurity incident public disclosure requirements. Ah, the irony! Who knew that keeping secrets could be so… lucrative?
Five illustrious US banking groups, led by the ever-dignified American Bankers Association, penned a letter on May 22, arguing that revealing cybersecurity incidents “directly conflicts with confidential reporting requirements intended to protect critical infrastructure and warn potential victims.” Because, of course, who needs transparency when you can have a cozy little secret? 🤭
This illustrious ensemble, which also includes the Securities Industry and Financial Markets Association, the Bank Policy Institute, Independent Community Bankers of America, and the Institute of International Bankers, claims that the rule is a veritable thorn in the side of regulatory efforts to bolster national cybersecurity. Oh, the drama!
The SEC’s Cybersecurity Risk Management rule, unveiled in July 2023, mandates that companies swiftly disclose cybersecurity incidents like data breaches or hacks. But lo and behold! The banking groups argue that this rule was flawed from the very beginning and has proven to be a troublesome beast since its inception. Who could have seen that coming? 🙄
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The groups are particularly keen on having “Item 1.05” rescinded from the SEC’s rules for Form 8-K reporting and the parallel reporting requirements applicable to Form 6-K. Because who doesn’t love a good bureaucratic loophole?
Form 8-K is the official vehicle for publicly notifying investors in US public companies of significant events, including those pesky cybersecurity incidents that might just be of interest to shareholders or the SEC. How thrilling!
“Critically, without Item 1.05, investor interests will still be protected,” the groups assert, “and we believe they would be better served through the pre-existing disclosure framework for reporting material information, which may include material cybersecurity incidents.” A classic case of “trust us, we know what we’re doing!”
The full petition is a veritable treasure trove of confusion from participants, specific incidents of ransomware attacks, and documented regulatory conflicts. A real page-turner, I must say!
Public Crypto Companies Impacted
And let’s not forget the public crypto companies caught in this delightful mess, such as Coinbase, which recently disclosed that hackers had bribed its support staff to leak user data. Oh, the scandal!
This revelation led to at least seven lawsuits raining down upon the company. Talk about a legal storm! 🌩️
Coinbase bravely rejected a $20 million ransom demand after staff leaked user data in a major phishing attack, which the exchange claims could cost it up to $400 million in damages. If only they had a crystal ball!
If the SEC decides to rescind the requirement, it may grant firms like Coinbase a little more breathing room to disclose cybersecurity incidents to the public. Because who doesn’t love a little extra time to prepare for the inevitable chaos?
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2025-05-26 06:46