U.S. regulators fined Altaba, the company formerly known as Yahoo!, $35 million on Tuesday to settle charges that kept its massive 2014 cyber security breach a secret from investors for more than two years.
The Securities and Exchange Commission’s case marks the first time it has ever gone after a company for failing to disclose a cyber security breach.
Altaba agreed to settle without admitting or denying any wrongdoing.
An Altaba spokesman did not immediately respond to a request for comment.
Yahoo’s information security team learned just days after the December 2014 breach that Russian hackers had stolen the company’s “crown jewels,” including email addresses, encrypted passwords and security questions, the SEC said in a statement.
Despite becoming aware of the breach and having it reported to Yahoo’s senior management and legal department, the company failed to properly investigate and did not disclose it to the public until more than two years later, when it was in the process of being acquired by Verizon Communication Inc, the regulator said.
The U.S. Justice Department announced charges last year against four men, including two officers in Russia’s Federal Security Service, for their roles in the theft of 500 million Yahoo accounts.
One of them, Karim Baratov, a Canadian citizen born in Kazakhstan, pleaded guilty late last year to charges related to helping Russian intelligence agents break into email accounts as part of a massive 2014 breach.
Baratov was expected to be sentenced on Tuesday for his role in the Yahoo hack.
During its investigation into the 2014 breach, Yahoo uncovered a separate 2013 breach that compromised all 3 billion of its accounts, which is by far the largest known breach of consumer information.