Responding quickly to the resignation of one of their own, Silicon Valley tech GCs are defending Ron Bell, the longtime Yahoo Inc. general counsel who left the company Wednesday after an SEC filing disclosed problems with the company’s investigation of a massive 2014 data breach.
Some GCs blamed Bell’s departure on company politics and said Bell is falling on the sword for larger issues at the beleaguered company.
“I don’t know what happened at Yahoo but I know it’s easy to blame the lawyers,” wrote Twitter Inc. general counsel Vijaya Gadde on her company’s platform. “I also know that Ron Bell is a good lawyer.”
Bell’s resignation was announced in a March 1 filing with the U.S. Securities and Exchange Commission. According to the filing, an independent committee of Yahoo’s board of directors assisted by the law firm Sidley Austin found that Yahoo’s legal department failed to appropriately respond to the 2014 data breach, which was followed by several other large breaches ultimately affecting 1.5 billion users. The breaches weren’t disclosed by the company until 2016.
“As a result, the 2014 Security Incident was not properly investigated and analyzed at the time, and the Company was not adequately advised with respect to the legal and business risks associated with the 2014 Security Incident,” the SEC filing said. The filing said Bell received no severance package in his resignation.
Additionally, the SEC filing revealed that another 32 million users accounts were accessed in forged cookie attacks. The filing also disclosed that 43 class-action suits are underway against Yahoo in connection with the breaches, which are being investigated by the FBI, the Federal Trade Commission and other agencies.
Also last month, $350 million was cut from Yahoo’s previously agreed upon, $4.8 billion sale price to Verizon Communications Inc.
On the same day Bell’s departure was announced on Wednesday, chief executive officer Marissa Mayer said she wouldn’t be receiving an expected cash bonus for 2016 and she offered not to accept her 2017 annual equity. Mayer’s annual target bonus is $2 million a year and her annual equity award is no less than $12 million on a base salary of $1 million, according to the New York Times.
(Photo, left: Ron Bell, GC at Yahoo.)
Bell, who could not be reached for comment, joined Yahoo in 1999 as senior corporate counsel, earning promotions to associate general counsel and deputy general counsel of various areas until 2012, when he became interim general counsel. He was promoted two months later to take over the role full time.
Darren Weingard, general counsel at Luxe, worked beside Bell from 2005 to 2012, and he found Bell “to be among the brightest, [sic]honest and thoughtful attorneys not only in the Yahoo legal department but with whom I have ever worked.”
“Ron was always diplomatic but never afraid to voice his opinions and I learned much from him and value my time with him as a colleague,” Weingard said in an email. “I was extremely distressed to hear the news and wish him well as he plots his further journey.”
Yahoo has suffered several personnel losses in the past year. According to a Reuters report, former chief information security officer Alex Stamos quit after learning of CEO Marissa Mayer’s approval of a dragnet-style software program built to enable search on all Yahoo email users’ communication.
Cooley partner and former eBay Inc. general counsel Michael Jacobson said he did not know of Bell’s departure until reached by telephone by The Recorder.
“I had no idea,” Jacobson said, “and to be honest, I’m a little shocked.”
Jacobson said he did not work directly with Bell, but they both operated in the same world as in-house counsel at fast-growing internet companies during the dot-com boom and bust of the late 1990s.
Jacobson compared Bell’s resignation to the departure of former Apple Inc. general counsel Nancy Heinen. In 2006, Heinen left the company following allegations of backdating stock options. In a 2008 deposition obtained by Corporate Counsel, Heinen’s then-boss Steve Jobs blamed almost all stock option inconsistencies on her. She currently is an adviser to several companies, according to her LinkedIn.
Comparing the two events, Jacobson said, resigned, “someone has to take the fall.”
Colin Stretch, general counsel at Facebook, also posted on his own wall in Bell’s defense.
He wrote “Have always known Ron Bell to be an excellent lawyer with a hard-earned and widespread reputation of being thoughtful, careful and *unfailingly* diligent. And a wonderful colleague to boot.”