Avoiding Cybersecurity Incident Overdisclosure:  Helpful Guidance

Mayer Brown Free Writings + Perspectives
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Mayer Brown Free Writings + Perspectives

In a statement yesterday, the Director of the SEC’s Division of Corporation Finance commented on the relatively new Form 8-K Item 1.05 requirement. Last summer when the SEC adopted the final rules relating to cybersecurity incidents, the rules included a new requirement under Item 1.05 of Form 8-K relating to the occurrence of an incident that the company had concluded was material. Division Director Gerding noted in his comments that, “[a]lthough the text of Item 1.05 does not expressly prohibit voluntary filings, Item 1.05 was added to Form 8-K to require the disclosure of a cybersecurity incident ‘that is determined by the registrant to be material,’ and, in fact, the item is titled ‘Material Cybersecurity Incidents.'”

As a result, he suggested that to the extent a company elects to disclose an incident as to which it has yet to make a materiality incident, it do so under a different item of Form 8-K, such as, for example, Item 8.01. If, after the passage of time, the incident is determined to be material, the company can make a filing under Item 1.05.

This is a very helpful clarification and one that he notes is not intended to discourage disclosure, but rather to avoid diluting the significance of the Form 8-K Item 1.05 disclosures.

See his full remarks.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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