This paper analyzes disclosing cybersecurity risk and regulatory compliance by the U.S. public companies, with reference to the sensitivity of the information in the market and the effectiveness of disclosure. With rising cyber threats, there is mounting pressure on firms to safeguard their financial systems and adhere to rules such as the 2011, 2018, and 2023 guidelines issued by the SEC, which require firms to report incidents in time and to disclose detailed risk management. However, the disclosure is often done in generic, boilerplate terms, and this limits its use by investors and raises the question of transparency. The study examines the extent to which data breaches affect risk assessment and consequent disclosures by managers. Breach severity and the quality of disclosure will cause different market responses, and disclosure quality will reduce adverse reactions by eliminating uncertainty. There are still compliance issues, especially among smaller companies that have fewer resources, resulting in inconsistent compliance with SEC requirements. The study also demonstrates that standardized models, advanced technologies, including machine learning, and a more robust board of control are required to improve the quality of disclosures. As part of this trend analysis (2015-2019), the paper has seen the balancing act of transparency, on the one hand, and exposure to vulnerability, on the other, as key to enhancing investor confidence and market efficiency. Keywords: Cybersecurity Disclosure, Regulatory Compliance, SEC Cybersecurity Reporting, Investor Confidence, Cyber Risk Management
Brakye et al. (Mon,) studied this question.