On March 2, 2018, Yahoo! entered into a proposed settlement of a securities class action filed against the company following its disclosures in 2016 that it had suffered significant data breaches in 2013 and 2014.
Under the settlement, which is still subject to court approval, Yahoo! has agreed to pay $80 million to settle claims that it misled investors by failing to disclose the breaches in its public filings, while still touting the strength of its cybersecurity practices. On the same day the settlement became public, Yahoo! moved to dismiss the claims being pursued by an opt-out plaintiff. Among other things, Yahoo! asserted in its motion that the complaint failed to adequately allege that it had misrepresented the strength of its cybersecurity protections, arguing that statements like “we take the securities of our users very seriously,” and “Yahoo is committed to gaining your trust,” were both not actionable misstatements and not rendered false by the data breaches.
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