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Does Cyber Security Matter to Investors?

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According to Fox Business, a survey conducted by Zogby Analytics shows investors may refuse to buy stock in companies that have demonstrated vulnerability to cyber-attacks.

More than 70 percent of investors, according to the survey, expressed a desire to review the cyber security history of companies with almost twice as many worried about a breach of customer data than theft of intellectual property.

Jim Butterworth, HBGary’s chief security officer points to the publicity brought by theft of consumer data, while pointing out that IP theft is actually worse, costing corporations billions of dollars in lost revenue.

Investor awareness about cyber security issues may be triggered, in part, by several recent high-profile cyber-attacks, including attacks at the Federal Reserve, The New York Times (NYSE: NYT), Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB), and Wells Fargo Bank (NYSE: WFC).

Although the White House announced a new executive order aimed at addressing the issue, lawmakers in Congress have not moved quickly enough, according to observers.

As a consequence, the New York Times reports that Internet companies, sensitive to all the negative publicity these attacks generate, are in a race to prove to consumers that each is better at keeping data safe from their competition.

Apple, for example, initiated a requirement that apps in its iOS operating system get permission from users before asking for their location or checking calendar entries or contacts on their iPhone.

Other companies are offering privacy tools such as ways to encode Facebook posts and secure personal data stored in the cloud.

Even Microsoft (NASDAQ: MSFT) has demonstrated a certain sensitivity to privacy issues by activating, by default, an anti tracking signal in its latest Internet Explorer browser.

Microsoft has also taken shots at rival, Google (NASDAQ: GOOG) with its “scroogled” campaign, charging the search engine giant with scanning emails and search histories in order to target advertising.

With the Zogby survey clearly demonstrating the priority investors place on cyber security, look for continued emphasis on this metric moving forward.

In fact, according to Fox, the movement is already underway with Citigroup (NYSE: C) only last week acknowledging “limited losses” and increased security expenditures from cyber-attacks.

Goldman Sachs (NYSE: GS) also mentioned cyber security in its annual filing indicating that it has “developed and implemented a framework of principles, policies and technology to protect the information provided to us by our clients and that of the firm from cyber-attacks.”

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