By Ash Mohanaprakas – Head of Information Security, Vault Platform
Nothing quite represents the role of the Chief Information Security Officer (CISO) like the Roman God of duality, Janus. Like Janus, CISOs look to both the past – managing legacy cybersecurity frameworks—and the future – planning strategies to protect the organisation from emerging threats. They balance internal oversight with external engagement, adapting to technological, regulatory, and economic shifts to drive effective cybersecurity strategies.
The SEC recently took a landmark step in cyber fraud enforcement by filing civil charges against a CISO for the first time. During the Sunburst attack on SolarWinds, the CISO (then VP of Security and Architecture) allegedly concealed cybersecurity vulnerabilities through misstatements and omissions, violating antifraud provisions of U.S. securities laws.
This is the first case to accuse an individual of scienter-based fraud related to cybersecurity disclosures, marking a significant shift in enforcement. The penalties include fines and a potential ban on holding officer or director roles at SEC-registered companies.
Understanding Cyber Fraud and its impact
Cyber fraud typically involves compliance failures and misstatements that slip through audits like ISO or SOC 2. These oversights often go unnoticed by external assessments but can be identified through real-time insights from internal teams. However, operational complexities often hinder organisations from addressing these risks effectively. Reports received as KPIs or KRIs lack the detail needed to identify compliance risks, vulnerabilities, or cyber fraud.
Can your organisation confidently identify and investigate cyber fraud through whistleblower reports?
If not, critical risks may go undetected.
The challenges of detecting Cyber Fraud
CISOs rely on their teams to flag pressing security issues, yet operational gaps remain. Reports are often funnelled to SOC teams, Security Engineers, or GRC functions, leading to varied interpretations:
- GRC teams may see a report as an already mitigated risk.
- Security Engineers focus on remediations within their workflows.
- SOC teams may dismiss vague reports as non-incidents or near-misses.
Without a clear escalation path, critical compliance risks may never reach the CISO’s desk or trigger a regulatory review.
At what point does such a report become a reportable incident under regulatory compliance? Infosec teams often can’t answer this, as they focus on cybersecurity standards, not SEC compliance requirements.
Strengthening the CISO’s role in reporting
To proactively address cyber fraud, CISOs must establish robust systems that:
- Detect fraud through well-structured reporting processes.
- Collaborate with Ethics and Integrity teams for external disclosures.
- Equip employees with tools and training to report suspicious activities confidently.
By taking these steps, organisations can reduce exposure to enforcement penalties while enhancing their overall cybersecurity posture.
Vault Platform for secure reporting
Vault Platform bridges the gap in traditional reporting mechanisms, ensuring critical cyber fraud issues reach the CISO without delay. With a 30-day SEC reporting deadline, speed and accuracy are paramount.
Vault Platform enhances compliance by offering:
- Customisable categories such as “Cybersecurity Fraud” to capture relevant incidents comprehensively.
- Anonymous reporting that enables employees and contractors to share concerns without fear of exposure.
- Direct routing to ensure reports are swiftly escalated to the appropriate teams, including the CISO.
Vault Platform’s configurable rules and information management structure allow the CISO and security team to gain peace of mind that reports are accessed securely by the right people, and acted on efficiently across stakeholders, which enables informed decisions about disclosures and remediation.
Whistleblowers as risk champions
Whistleblowers are often viewed with apprehension, but with the right tools, they can become valuable allies in mitigating cybersecurity risks. Platforms like Vault empower whistleblowers to report concerns directly and securely, minimising regulatory penalties through proactive disclosure – an approach demonstrated in cases such as Verizon.
Speak to us about how we can help you build a stronger cybersecurity culture by enabling transparent, secure, and effective reporting.
