THE MAGAZINE

Painful Disclosures

By Peter Piazza

The average stock prices of six companies that had disclosed an information security breach between February 2005 and June 2006 fell by five percent within a month of the disclosure and remained as much as 8.5 percent below predisclosure levels for nearly a year. That damage compounds any harm done to the organization’s reputation, not to mention regulatory penalties that have reached as much as $15 million, according to a research study by Enterprise Management Associates (EMA), an IT management consulting firm.

@ An executive summary of the EMA paper, The Security of Information: A Strategic Approach to Current Topics and Trends, is at SM Online. click on “beyond print” and scroll down to this item.

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