SEC Agrees With First American On Massive Mortgage Data Leak And Disclosure

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The Securities and Exchange Commission (SEC) has agreed with First American to leak millions of financial statements and subsequent disclosures.

Announced on Tuesday settlement the case will be closed in exchange for a $ 487,616 fine and compliance with a cease-and-desist order.

The SEC’s complaints concern the disclosure of approximately 885 million financial statements related to mortgage transactions from 2003 to 2019.

Cybersecurity expert Brian Krebs reported a problem to the US real estate giant on May 24, 2019, noting that the leak contained, among other things, bank account numbers, mortgage records, tax data, social security numbers, and scanned images of a driver’s license.

The leak was localized on the First American website and was repaired after the company received notification. First American blamed the serious security breach on a “design defect,” issued a press statement on May 24, and informed the panel of the vulnerability identification on May 28.

However, the SEC says that First American’s actions were insufficient to comply with disclosure rules, as “the senior executives responsible for public statements” were not informed of the “scope” of the violation.

“In particular, the ruling found that First American’s senior management was not informed that the company’s information security staff had identified a vulnerability several months earlier, but were unable to fix it in accordance with company policy,” the agency said in a statement.

As a result, the SEC stated that the company did not disclose all relevant and relevant information regarding the violation to regulators and accused First American of violating disclosure controls and procedures under Rule 13a-15 (a) of the Act. Exchange Act (.PDF).

First American has neither confirmed nor denied the SEC’s allegations.

Update 16.09 BST: First US spokesman told ZDNet:

“We are pleased to resolve this issue with the SEC and remain committed to meeting all of the SEC’s disclosure controls.”

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