Yahoo general counsel steps down after cyber attack report

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Yahoo general counsel Ronald Bell has stepped down from his role following a Securities and Exchange Commission (SEC) filing on a 2014 hack this week, which showed $11m (£8.9m) of losses relating to legal costs.

The SEC filing detailed the company’s investigation into the data breaches, which affected 500 million user accounts in 2014 and more than one billion user accounts in 2013.

Yahoo said that the company lost $16m related to the cybersecurity incidents in 2016, $5m of which was associated with the ongoing forensic investigation and remediation activities and the rest attributed to legal costs.

Bell has resigned with immediate effect as the company’s general counsel and secretary and from all other positions with the company. The company said: “No payments are being made to Bell in connection with his resignation.”

Bell has worked at Yahoo since 1999, having joined as senior corporate counsel from Apple. He took on the role of general counsel and company secretary in 2012 after working as interim general counsel for two years.

During his time as general counsel, Bell supported plans for a spin off of Yahoo’s Asia assets, the prospective sale of Yahoo’s operating business, and the transformation of Yahoo from an operating company into a registered investment company.

He was also involved in successfully working to reverse a $2.7bn judgment against the company in Mexico in 2012.

Yahoo has confirmed that Sheppard Mullin Richter & Hampton partner and former Broadcom general counsel Art Chong will act as interim general counsel for Yahoo. Chong played an important role working with Yahoo’s Board on matters surrounding the Verizon transaction in 2016.

According to data from The Lawyer Market Intelligence, the firm’s external advisers include Weil Gotshal & Manges, Skadden Arps Slate Meagher & Flom, Wilson Sonsini Goodrich & Rosati, Cravath Swaine & Moore and Munger Tolles & Olson.

Details of the 2013 data breach investigation were disclosed by Yahoo in December 2016, determining that the company believed an unauthorised third party stole data and was not able to identify the intrusion associated with this theft.

The company’s SEC filing indicates that to date, approximately 43 consumer class action lawsuits and one stockholder class action have been filed against Yahoo in US federal and state courts, and in foreign courts, relating to the security incidents.

A statement from Yahoo said: “While a loss from these matters is reasonably possible, the company cannot reasonably estimate a range of possible losses related to these legal proceedings at this time because the legal proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified.

“Based on current information, the company does not believe that a loss from these matters is probable and therefore has not recorded an accrual for litigation or other contingencies relating to the security incidents.”

The post Yahoo general counsel steps down after cyber attack report appeared first on The Lawyer | Legal News and Jobs | Advancing the business of law.



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