New Filing Confirms Yahoo Was Aware of Large-Scale Email Hack in 2014

In September, Yahoo confirmed that at least 500 million of its users' accounts had been compromised during an attack in late 2014. Now, in a recent filing with the Securities and Exchange Commission, it was revealed that the company knew about the hack when it originally happened in 2014, but waited two years to divulge it to the public (via TechCrunch)

Describing the investigation, the new SEC filing notes a "state-sponsored actor" who gained access to the company's network in late 2014, along with Yahoo's awareness and identification of the individual in question during the same time period. Information stolen included names, email addresses, telephone numbers, dates of birth, hashed passwords, and encrypted or unencrypted security questions and answers.

In late July 2016, a hacker claimed to have obtained certain Yahoo user data. After investigating this claim with the assistance of an outside forensic expert, the Company could not substantiate the hacker’s claim. Following this investigation, the Company intensified an ongoing broader review of the Company’s network and data security, including a review of prior access to the Company’s network by a state-sponsored actor that the Company had identified in late 2014. Based on further investigation with an outside forensic expert, the Company disclosed the Security Incident on September 22, 2016, and began notifying potentially affected users, regulators, and other stakeholders.

Now a board made up of independent counsel and a forensic expert is said to be investigating "the scope of knowledge within the company in 2014," as well as Yahoo's basic security measures and related incidents. The filing describes $1 million in losses for Yahoo relating to the security breach so far.

Additionally, Yahoo said that 23 class action lawsuits have been filed against the company by consumers targeted by the security breach in 2014, in both federal and state courts, as well as foreign courts. Plaintiffs in the cases claim to have been "harmed by the company's alleged actions and/or omissions" relating to the hack. The scope and monetary damages sought by each consumer was not divulged.

In attempts to move past the incident, Yahoo is cooperating with federal, state, and foreign governments and agencies who are investigating the hack. The biggest blowback for Yahoo might still be in its planned sale to Verizon, the latter company now asking for a $1 billion discount due to Yahoo's current turbulent drama with the news of the 2014 hack.