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September 26, 2017

The SEC Should Immediately Adopt An "Equifax Rule": Require Companies to Promptly Disclose Any Significant Computer Hack

FOR IMMEDIATE RELEASE
Tuesday, September 26, 2017
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com

Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued the following statement on SEC Chairman Jay Clayton’s testimony before the Senate Banking Committee regarding corporate disclosure of computer hacks:

“The American people are extremely concerned about the epidemic of corporations’ computers getting hacked, including Equifax, Yahoo and Target.  They should be, because a ‘hack’ is the theft of their personal information by criminals seeking to rip them off with the stolen data.  The only way Americans can protect themselves as victims of these crimes is if they know about them.  That’s why the SEC should announce that effective immediately corporations must promptly disclose all hacks unless they are insignificant. 

“Such an SEC announcement would, in effect, deem significant hacks material, eliminating the fact-based materiality test that directors, officers and companies must now undertake.  As proven conclusively by stock price drops after the disclosure of hacks, there is no genuine dispute that hacks are viewed as material to investors.  Therefore, Chairman Clayton should state that the SEC will be operating under a rebuttable presumption that hacks are material and must be promptly disclosed, unless there are overwhelming and incontrovertible facts to the contrary. 

“This should be called the ‘Equifax Rule’ so that Americans are never again victimized twice:  first by the criminals and then by the corporation.  Such a presumption would further the SEC’s core mission to protect investors, markets and all Americans.” 

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.

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