Stepped-up SEC Enforcement Makes Proactive Security a Must
The SEC’s finalized cybersecurity rules, effective starting mid-December 2023, place a spotlight on requirements for transparency regarding material security risks and incidents, and requirements for security safeguards commensurate with the risks. Investors now seek security maturity as a market differentiator, making it imperative for companies to proactively address vulnerabilities and prevent incidents before they happen.
Underscoring the SEC’s push for greater enforcement of transparency and resilience requirements, the SEC brought charges against SolarWinds and its Chief Information Security Officer (CISO). The complaint alleges, among other things, that SolarWinds violated Exchange Act requirements to maintain reasonable safeguards against unauthorized access to key company assets. According to the complaint, this included repeated exploitation of the vulnerability that attackers later used in the SUNBURST incident.
The SEC’s rules and enforcement actions amplify the value of preventing security incidents and unauthorized access to public company assets. Proactive security practices, such as vulnerability disclosure and handling programs and bug bounties, are a strategic investment. By identifying vulnerabilities so they can be mitigated before attackers exploit them, companies can not only save resources but can also help avoid the reputational and financial toll that an SEC violation would bring.
Empowering CISOs: Champions of Cyber Resilience
In the relentless and high-intensity realm of cybersecurity, CISOs emerge as pivotal figures steering organizations toward resilience — often working with limited resources. The SEC rules and enforcement actions emphasize the need for CISOs to lead with a proactive mindset in rooting out potential issues.
CISOs can leverage bug bounty programs as a force multiplier. While CISOs only have so many personnel, bug bounty programs enable them to collaborate with ethical security experts to identify and address vulnerabilities before they become material incidents. This proactive stance aligns with regulatory expectations, such as requirements enforced by the SEC under the Exchange Act to design and maintain reasonable controls to prevent unauthorized access to public company assets.
Bug bounties are also a cost-effective use of resources — the average bounty paid for a valid vulnerability on the HackerOne platform is about $1,000, while the average cost of a data breach is a staggering $4.45 million and growing.
HackerOne Is Your Partner in Cyber Resilience
Harnessing the power of the world’s largest ethical hacker community, HackerOne offers several solutions:
Proactive Cybersecurity Measures for Investor Confidence
The SEC’s strengthened rules and enforcement actions serve as a clarion call for public companies to ensure their cybersecurity strategies are sufficiently robust. CISOs, armed with the lessons learned from such cases, should champion the adoption of proactive security measures like bug bounty programs to enhance resilience and help prevent security incidents. When combined with comprehensive security safeguards, bug bounties help prevent cyber incidents and showcase security maturity to investors. In a regulatory environment where cybersecurity increasingly takes center stage, prioritizing proactive safeguards for digital assets not only helps comply with legal obligations, but also actively contributes to a more secure digital landscape. To learn more about how to implement proactive cybersecurity measures for SEC compliance, contact the experts at HackerOne.