Who’s Watching the Watchdogs? SEC Hack Exposes Critical Financial Regulation Faults

Savage, Combs and Villoch, PLLC
23
Sep

SEC Hack Exposes Critical Security Faults

SEC hackOn Thursday, it was announced that the Securities and Exchange Commission (SEC), the nation’s top finance and securities regulator, had experienced a critical cyber security breach. The breach, which occurred in 2016, allowed hackers access to the SEC’s EDGAR system, a database which houses corporate filings and announcements for a multitude of Wall Street firms.

The SEC hack has shaken investors and lawmakers as it poses serious questions regarding the SEC’s security measures and protocol. It is also possible that hackers may have profited on the insider info by trading on it. According to a Reuters report, the database contained sensitive, “market-moving information”.

The announcement came as a shock to everyone and with concerns arising over the SEC’s ability to maintain and protect its security systems, you may be wondering what this means for your investments.

For it’s part the SEC has taken steps to assure that the security breach has been addressed, however the SEC hack comes at a period of heightened concern over cyber security. This breach follows close on the heels of the massive Equifax scandal, in which hackers gained access to millions of customer records.

Security Protocol in Question

The SEC hack has raised questions in Washington among policymakers concerning what steps are being taken by regulators to prevent critical breaches like this one from occurring. SEC Chairman Jay Clayton will be on Capitol Hill on Tuesday, appearing before the Senate Banking Committee.

The chairman is expected to come under fire from policymakers, who will demand a clear account of the exact nature and extent of the SEC hack.

Ahead of this hearing, other financial and securities regulators have come forward with their cyber security measures.

Investor Resources

If you’d like to find out more about the SEC hack, read the full Reuters article here. For more regulatory news and investing tips, check out our blog.