Intercontinental Exchange, Inc. (ICE), the owner of the New York Stock Exchange, has agreed to settle with the Securities and Exchange Commission (SEC) for $10 million over allegations that it failed to timely notify the SEC of the cybersecurity incident it experienced in 2021 involving its virtual private network.

The SEC alleged that ICE should have notified it immediately of the incident, but ICE contends that “[t]his settlement involves an unsuccessful attempt to access our network more than three years ago…The failed incursion had zero impact on market operations. At issue was the time frame for reporting this type of event under Regulation SCI.”

Apparently, the SEC alleges that it should have been notified immediately, and ICE contends that the incident was not material and did not rise to the level of significance that ICE believed  obligated it to notify the SEC “immediately.”

A settlement does not indicate fault. The lesson here is that the SEC takes a conservative approach to reporting obligations and will use its muscle if reporting is not provided in what it deems is a timely manner.

Photo of Linn Foster Freedman Linn Foster Freedman

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her…

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her practice on compliance with all state and federal privacy and security laws and regulations. She counsels a range of public and private clients from industries such as construction, education, health care, insurance, manufacturing, real estate, utilities and critical infrastructure, marine and charitable organizations, on state and federal data privacy and security investigations, as well as emergency data breach response and mitigation. Linn is an Adjunct Professor of the Practice of Cybersecurity at Brown University and an Adjunct Professor of Law at Roger Williams University School of Law.  Prior to joining the firm, Linn served as assistant attorney general and deputy chief of the Civil Division of the Attorney General’s Office for the State of Rhode Island. She earned her J.D. from Loyola University School of Law and her B.A., with honors, in American Studies from Newcomb College of Tulane University. She is admitted to practice law in Massachusetts and Rhode Island. Read her full rc.com bio here.