iLearningEngines, an AI training company, publicly reveals a cyber attack amid an ongoing Securities and Exchange Commission (SEC) investigation.
In a significant turn of events, AI training company iLearningEngines has announced that it experienced a cyberattack in November 2024. The attack, which is currently under investigation by the Securities and Exchange Commission (SEC), has reportedly resulted in a financial loss of around $250,000 and raised concerns about the company's financial reporting and operational transparency.
The cyberattack targeted a critical vendor involved in AI system development, underscoring the potential vulnerabilities in AI training infrastructures. iLearningEngines has since launched an internal investigation, worked with a forensic firm, and consulted external advisors to assess and remediate the unauthorized activity.
The SEC's investigation into iLearningEngines' internal controls over financial reporting may be related to the cyberattack. As a result, the company has advised that its previously issued financial reports dating back to 2019 should no longer be relied upon. The SEC's subpoena, issued less than a month ago, is probing potentially material weakness in iLearningEngines' internal controls over financial reporting.
The cyberattack may have caused financial irregularities that the SEC is investigating. Some email messages and certain files on iLearningEngines' network were illegally accessed during the attack. The company has stated that the incident is contained, but specific technical details have not been fully disclosed.
The potential impact on iLearningEngines' financial reporting might be notable given the SEC probe context, as the cyberattack could have affected internal controls, data integrity, or caused disruptions in business continuity that require disclosure and possibly affected earnings. However, no precise official statements detailing the extent of financial reporting effects have been publicly released as of mid-2025.
The cyberattack could potentially expose iLearningEngines to risks such as potential litigation, changes in customer or investor behaviour, and regulatory scrutiny. The company, which boasts more than 1,000 enterprise customers spanning multiple industries, including healthcare, education, insurance, retail, energy, and manufacturing, is working diligently to contain and remediate the situation.
As the investigation continues, iLearningEngines remains committed to maintaining the trust and confidence of its customers, employees, and investors. The company will provide updates as more information becomes available.
The cyberattack has raised concerns about potential vulnerabilities in AI system development related to cybersecurity, particularly business operations and technology infrastructures. The SEC's ongoing investigation into iLearningEngines' internal controls over financial reporting may be related to the unauthorized access of certain files and email messages during the attack, which could have potentially caused financial irregularities.
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