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Yahoo Under SEC Investigation for Taking too Long to Reveal Data Breaches

24 January 2017

Revealing two massive breaches affecting over a million users past year hasn't (and shouldn't) gone well for Yahoo.

Shares of Yahoo (YHOO) were advancing about 1% in after-hours trading on Monday as the company posted stronger-than-expected results for the fourth quarter of 2016.

It is still unclear why it took Yahoo over two years to disclose the incidents publicly after the breaches happened. Mere months after Yahoo made the 2014 cyberattack public in September 2016 the tech firm disclosed a second data breach which exposed over one billion of its users' private information.

The Silicon Valley company registered fourth-quarter profits of 25 cents per share on revenue of $1.47 billion, besting the average analyst expectations of 21 cents on revenue of $1.38 billion.

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That was the biggest known data breach on record until last month, when the company disclosed an even more massive security breach - saying that data from more than 1 billion user accounts was stolen by an unknown party in 2013. "With our 2016 and Q4 financial results ahead of plan, and the continued stability in our user engagement trends, the opportunities ahead with Verizon look bright".

A Yahoo spokesperson told ZDNet at the time that the company was "working closely with law enforcement". In September, it disclosed that 500 million accounts had been hacked in 2014. These include the US Securities and Exchange Commission (SEC), the Federal Trade Commission and the US attorney's office in Manhattan.

The delay to the closing of the Verizon deal adds further uncertainty to the transaction which has been thrown into turmoil following Yahoo's recent revelation that it had been the victim of several major hacking incidents. At one point, after the second hack was announced, Verizon was reportedly considering exiting the deal but, according to Sunday night's WSJ report, Verizon says the deal is still in place. Yahoo said in a November filing that it had been cooperating with a number of federal agencies, including the S.E.C., who were investigating the 2014 breach.

An SEC spokesman and a Yahoo spokesman declined to comment.

Yahoo Under SEC Investigation for Taking too Long to Reveal Data Breaches