Form N-CEN ALTABA INC. For: Dec 31
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X0201 N-CEN LIVE 0001011006 XXXXXXXX false false false N-2 Altaba Inc. 811-23264 0001011006 549300ZJC0V1K2ZCKG85 140 E 45th St Suite 15A New York 10017 US-NY US 6466792000 U.S. Bancorp Fund Services LLC 622 N Cass St. Milwaukee 53202 18336121912 Journals containing an itemized daily record in detail of all purchases and sales of securities, all receipts and deliveries of securities, all receipts and disbursements of cash and all other debits and credits. General and auxiliary ledgers reflecting all assets, liability, reserve, capital, income and expense accounts. N N N N-2 N Eric K Brandt N/A N Catherine J Friedman N/A N Richard L Kauffman N/A N Tor R Braham N/A N Thomas J McInerney N/A Y DeAnn Fairfield Work N/A 140 East 45th St. 15th Floor New York 10017 XXXXXX N N N N N PricewaterhouseCoopers LLP 00238 5493002GVO7EO8RNNS37 N N N N N Altaba Inc. 549300ZJC0V1K2ZCKG85 N N/A Y N N N N/A N/A N/A Rule 32a-4 (17 CFR 270.32a-4) N N N N Morgan Stanley Smith Barney LLC 801-70103 000149777 7PDDXEMZ0ZV0CEDU4D16 N BlackRock Advisors, LLC 801-47710 000106614 5493001LN9MRM6A35J74 N Computershare Trust Company, N.A 85-05006 2549001YYB62BVMSAO13 N N N Clearwater Advisors, LLC 254900O9Z7V59SDFBW75 N N US Bank N.A 6BYL5QZYBDK8S7L73M02 N N Bank - section 17(f)(1) (15 U.S.C. 80a-17(f)(1)) N N U.S. Bancorp Fund Services LLC N1GZ7BBF3NP8GI976H15 N N N J.P. Morgan Chase, Chase Securities Inc. 8-35008-0 000000079 ZBUT11V806EZRVTWT807 21682575.038000000000 GOLDMAN SACHS & CO. LLC 8-12900-0 000000361 FOR8UP27PHTHYVLBNG30 21546304.806000000000 43228879.840000000000 Barclays Capital Inc. 8-41342-0 000019714 AC28XWWI3WIBK2824319 28018896138.760000000000 RBC CAPITAL MARKETS, LLC. 8-45411 000031194 549300LCO2FLSSVFFR64 5670161807.810000000000 J.P. MORGAN SECURITIES LLC 8-35008-0 000000079 ZBUT11V806EZRVTWT807 22795487680.750000000000 BNY MELLON CAPITAL MARKETS, LLC 8-45411-0 000017454 VJW2DOOHGDT6PR0ZRO63 20221492778.500000000000 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 8-72210-0 000007691 8NAV47T0Y26Q87Y0QP81 19274830682.220000000000 GOLDMAN SACHS & CO. LLC 8-12900-0 000000361 FOR8UP27PHTHYVLBNG30 18359354390.570000000000 WELLS FARGO SECURITIES, LLC 8-65876-0 000126292 VYVVCKR63DVZZN70PB21 15245373154.560000000000 MIZUHO SECURITIES USA LLC 8-37710 000019647 7TK5RJIZDFROZCA6XF66 15001132267.120000000000 CITIGROUP GLOBAL MARKETS INC. 8-81770-0 000007059 MBNUM2BPBDO7JBLYG310 14773860977.560000000000 MERRILL LYNCH PROFESSIONAL CLEARING CORP. 8-33359 000016139 549300PMHS66E71I2D34 11561374157.930000000000 202459585256.000000000000 N 28132348.000000000000 Common stock N/A N N Common stock N N N 0.000000000000 0.460000000000 N/A 23.210000000000 true true
Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Altaba Inc. In planning and performing our audit of the consolidated financial statements of Altaba Inc. and its subsidiary ("the Fund") as of and for the year ended December 31, 2019, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), we considered the Fund's internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the consolidated financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Fund's internal control over financial reporting. The management of the Fund is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A fund's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A fund's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the fund; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the fund are being made only in accordance with authorizations of management and directors of the fund; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a fund's assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the fund's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Our consideration of the Fund's internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control over financial reporting that might be material weaknesses under standards established by the PCAOB. However, we noted no deficiencies in the Fund's internal control over financial reporting and its operation, including controls over safeguarding securities, that we consider to be material weaknesses as defined above as of December 31, 2019. This report is intended solely for the information and use of the Board of Directors of Altaba Inc. and its subsidiary and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties. /s/ PricewaterhouseCoopers LLP New York, New York February 24, 2020
Legal Contingencies General The Fund has been regularly involved in claims, suits, government investigations, and proceedings arising from the ordinary course of the Fund's business, including actions with respect to intellectual property claims, privacy, consumer protection, information security, data protection or law enforcement matters, commercial claims, stockholder derivative actions, purported class action lawsuits, and other matters. Except as otherwise specifically described in this Note 7, during the periods presented we have not: (i) recorded any accrual for loss contingencies associated with the legal proceedings described in such Note 7; (ii) determined that an unfavorable outcome is probable; or (iii) determined that the amount or range of any possible loss is reasonably estimable. The ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. Furthermore, in the case of the Security Incidents described herein, alleged damages have not been specified, and there are significant factual and legal issues to be resolved. The Fund will continue to evaluate information as it becomes known and will record an accrual for estimated losses at the time or times it is determined that a loss is both probable and reasonably estimable. In the event of a determination adverse to the Fund, its subsidiary, directors, or officers in these matters, the Fund may incur substantial monetary liability, and be required to change its business practices. Either of these events could have a material adverse effect on the Fund's financial position, results of operations, or cash flows. The Fund may also incur substantial legal fees, which are expensed as incurred, in defending against these claims. From time to time the Fund may enter into confidential discussions regarding the potential settlement of pending proceedings, claims or litigation. There are a variety of factors that influence our decisions to settle and the amount (if any) we may choose to pay, including the strength of our case, developments in the litigation, the behavior of other interested parties, the demand on management time and the possible distraction of our employees associated with the case and/or the possibility that we may be subject to an injunction or other equitable remedy. In light of the numerous factors that go into a settlement decision, it is difficult to predict whether any particular settlement is possible, the appropriate terms of a settlement or the opportune time to settle a matter. The settlement of any pending litigation or other proceedings could require us to make substantial settlement payments and result in us incurring substantial costs. Security Incidents Contingencies On September 22, 2016, the Fund disclosed that a copy of certain user account information for approximately 500 million user accounts was stolen from the Fund's network in late 2014 (the "2014 Security Incident"). On December 14, 2016, the Fund disclosed that, based on its outside forensic expert's analysis of data files provided to the Fund in November 2016 by law enforcement, the Fund believes an unauthorized third party stole data associated with more than one billion user accounts in August 2013 (the "2013 Security Incident"). Verizon subsequently disclosed that the 2013 Security Incident involved over three billion user accounts. In November and December 2016, the Fund disclosed that based on an investigation by its outside forensic experts, it believes an unauthorized third party accessed the Fund's proprietary code to learn how to forge certain cookies. The outside forensic experts have identified approximately 32 million user accounts for which they believe forged cookies were used or taken in 2015 and 2016 (the "Cookie Forging Activity"). The 2013 Security Incident, the 2014 Security Incident, and the Cookie Forging Activity are collectively referred to herein as the "Security Incidents". The total cumulative amount accrued related to the Security Incidents was $152 million, of which $67 million is outstanding and included in other liabilities on the consolidated statement of assets and liabilities. Numerous putative consumer class action lawsuits were filed against the Fund in U.S. federal and state courts, and in foreign courts, relating to the Security Incidents, including the following: (1) In Re: Yahoo! Inc. Customer Data Security Breach Litigation, U.S. District Court for the Northern District of California Case No. 5:16-md-02752-LHK ("federal consumer class action"); (2) Yahoo! Inc. Private Information Disclosure Cases, Superior Court of California, County of Orange Case No. JCCP 4895 ("California consumer class action"); (3) Demers v. Yahoo! Inc., et al., Province of Quebec, District of Montreal Superior Court Case Nos. 500-06-000841-177 and 500-06-000842-175; (4) Gill v. Yahoo! Canada Co., et al., Supreme Court of British Columbia, Vancouver Registry Case No. S-168873; (5) Karasik v. Yahoo! Inc., et al., Ontario Superior Court of Justice Case No. CV-16-566248-00CP; (6) Larocque v. Yahoo! Inc., et al., Court of Queen's Bench for Saskatchewan Case No. QBG 1242 of 2017; (7) Sidhu v. Yahoo Canada Co., et al., Court of Queen's Bench for Alberta Case No. 1603-22837; (8) Lahav v. Yahoo! Inc., Tel Aviv-Jaffa District Court Case No. 61020-09-16 ("Lahav"); and (9) Reinzilber Yahoo! Inc., Tel Aviv-Jaffa District Court Case No. 7406-08-17 ("Reinzilber"). Plaintiffs, who purport to represent various classes of users, generally claim to have been harmed by the Fund's alleged actions and/or omissions in connection with the Security Incidents and assert a variety of common law and statutory claims seeking monetary damages or other related relief. In October 2018, the Fund announced that it had reached an agreement with plaintiffs' counsel to resolve all pending claims in the federal and California consumer class actions. The agreement is subject to certain conditions, including Court approval and therefore may not result in a final settlement. On December 3, 2018, the Tel Aviv-Jaffa District Court granted plaintiffs' counsel petition to dismiss the Lahav and Reinzilber actions, in view of the proposed settlement of the federal consumer class action. On January 28, 2019, the Court in the federal consumer class action denied the plaintiff's motion for preliminary approval of the proposed settlement. On April 8, 2019, the parties filed a revised settlement agreement and renewed motion for preliminary approval. On July 20, 2019, the Court granted preliminary approval. The Court has scheduled an April 9, 2020 hearing to decide whether to grant final approval to the proposed class action settlement. Additional lawsuits and claims related to the Security Incidents may be asserted by or on behalf of users, partners, or others seeking damages or other related relief. In addition, the Fund is cooperating with federal, state, and foreign governmental officials and agencies seeking information and/or documents about the Security Incidents and related matters, including the U.S. Federal Trade Commission, the U.S. Securities and Exchange Commission, a number of State Attorneys General and the U.S. Attorney's office for the Southern District of New York. Following the consummation of the Sale Transaction, pursuant to the transaction agreement with Verizon, the Fund continues to be responsible for 50 percent of certain post-closing cash liabilities under consumer class action cases related to the Security Incidents. In July 2018, the parties to state and federal shareholder derivative litigation reached an agreement in principle to resolve the state and federal shareholder derivative cases, subject to Court approval. On January 9, 2019, the Court granted final approval to the settlement. The Fund received money from insurance companies, which is included in other income on the consolidated statement of operations. The shareholder derivative litigation is now resolved.
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