Okta Stock Tumbles Amid Digital Breach Investigation As Cybersecurity Risks Mount

Access management and cloud identity group Okta is investigating a digital data breach following a warning on Russian cyber attacks from President Joe Biden.

Updated at 8:34 am EST

Okta Inc.  (OKTA) – Get Okta, Inc. Class A Report shares slumped lower Tuesday after the tech group, which manages network access for thousands of U.S. companies, began investigating reports of an illegal data breach. 

Okta was alerted to the potential breach when hackers, allegedly representing a group called LAPSUS$, posted photographs of what were claimed to be the San Francisco-based group’s internal technology on the Telegram channel. CEO Todd McKinnon said the photos could be linked to an attempted hack in January that has since been contained. 

“Based on our investigation to date, there is no evidence of ongoing malicious activity beyond the activity detected in January,” McKinnon said Tuesday through his verified Twitter account. 

Okta shares were marked 7.35% lower in pre-market trading Tuesday to indicate an opening bell price of $156.95 each. 

Cybersecurity risk has intensified in recent days following comments from President Joe Biden warning of a potential attack from Russian hackers in reprisal to western sanctions linked to its war on Ukraine.

Scroll to Continue

“The more Putin’s back is against the wall, the greater the severity of the tactics he may employ. One of the tools he’s most likely to use in my view, in our view, is cyberattacks,” Biden told reporters in Washington Monday. “The magnitude of Russia’s cyber capacity is fairly consequential and it’s coming.”

European officials, meanwhile, agreed to a policy framework Tuesday that would manage a cyberattack on EU institutions following calls earlier this month for an emergency response fund to manage cyber risks. 

Those risk was highlighted by a broad App system outage reported yesterday by Apple  (AAPL) – Get Apple Inc. Report, an otherwise rare disruption for the world’s biggest tech company that affected both its corporate and retail operations as well as App-related services such as music and podcasts.

Apple’s status page noted the issued was resolved late Monday afternoon, with Bloomberg reporting that the outage was linked to a DNS, or Domain Name System error similar to those which triggered disruptions for Facebook and Instagram last year.

The Identity Theft Resource Center (ITRC) said earlier this year that 2021 was a record year for cyber attacks, with 1,862 verified data breaches, a 68% increase from 2020.

“There is no reason to believe the level of data compromises will suddenly decline in 2022,” said Velasquez said ITRC CEO Eva Velasquez.

Research from IBM  (IBM) – Get International Business Machines Corporation Report and the Ponemon Institute suggests the average cost of a data breach for a U.S.-based company is around $9.05 million.