NewsVans, Vans shares
Dec 19, 2023 06:45 AM EST
The North Face and Vans owner VF Corp. saw a sharp decline in their stock price on Monday following their announcement that a breach had compromised part of their capabilities to ship orders in time for the holidays.
According to the firm, hackers stole personal information by encrypting "some" of its systems. These are some of the characteristics of ransomware, which is used by criminals to threaten businesses and demand large payments. Regarding whether the event was a ransomware attack, VF Corp. declined to comment. On Monday, the stock dropped by over 7% at closing.
The event was disclosed by VF Corp. on the same day as the U.S. The Securities and Exchange Commission implemented new regulations on cyber disclosure.
These rules require businesses to notify their investors of "material cybersecurity incidents" as soon as they believe a breach would negatively impact their bottom lines, which is four days from now. Dec. 13 was the first day that VF Corp. discovered hackers in its system, thus the corporation recognized the danger as substantial really quickly.
It is anticipated that the attack would affect the business's operations just before the crucial holiday shopping season. Although the company's capacity to execute orders has been impacted by the attack, clients can still place purchases online.
The attack's entire extent is yet unknown, and the corporation stated that until recovery operations are finished, it would probably continue to have a significant impact.
The goal of the new SEC regulations is to make it more evident to investors how assaults can hurt companies.
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When Caesars Entertainment, a gambling company was compromised earlier this year, for instance, and sources previously told CNBC that the business discreetly paid a $15 million ransom. Caesars did not reveal that it was impacted until MGM Resorts was also targeted by the same assailant.
Caesars most likely would have had to disclose the hack and the payment far sooner in accordance with the new disclosure requirements. Businesses that pay ransoms are highly discouraged from doing so by regulators and law enforcement. However, many businesses still do so in light of the crippling consequences that cyber disruptions may have.
The most recent significant business to have a cyberattack that interfered with business operations is VF Corp. Apart from MGM and Caesars, Clorox was compromised early this year, preventing the business from maintaining its products on shop shelves.
The company's quick acknowledgment of the breach demonstrates compliance with the regulations, emphasizing the need for transparency regarding cybersecurity incidents. While the full extent of the attack is yet unknown, VF Corp. anticipates a significant impact on operations, especially during the critical holiday shopping period. The incident underscores the persistent threat of cyberattacks to businesses and the importance of robust cybersecurity measures in safeguarding sensitive information and maintaining operational resilience.
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