Data breaches have become an all-consuming topic of late.
Stories about data theft dominate political headlines, boardroom
discussions and family meetings around the dinner table. They, of
course, have also been the subject of government investigations and
private litigation.
The current environment is not unlike other moments in the
recent past that seem to have captured the attention of Wall
Street, K Street and Main Street, including the financial reporting
scandals of the early 2000s. During the financial reporting
scandals in the early 2000s, regulators and private litigants
looked not only to the entities and their executives committing the
fraud, but also to the so-called "watchdogs" —
financial statement auditors. Plaintiffs alleging securities fraud
claimed that the auditor must have known about the fraud, or should
have discovered it, regardless of what the fraud was, or whether it
touched on a subject within the auditor's purview.
