SEC Hack Will Not Prevent It From Sharpening Cybersecurity Enforcement

The SEC recently disclosed in both a press release and Senate testimony that a 2016 hack of its test filing system may have provided a basis for illicit trading. However, top SEC officials assure that falling victim itself will not hold the SEC back from its efforts at enforcing proper cybersecurity practices and disclosures for regulated entities. Going forward, the SEC’s internal and external oversight efforts will go hand in hand, including efforts through the newly formed Cyber Unit, experts told the Cybersecurity Law Report. “If anything, I think this intrusion at the SEC has only highlighted for the SEC how often this is going to occur . . . and that companies really need to be ready and prepared for this and take active steps to make sure their own data isn’t compromised,” said David L. Axelrod, Ballard Spahr partner and former supervisory trial counsel at the SEC’s Philadelphia regional office. See “SEC Officials Flesh Out Cybersecurity Enforcement and Examination Priorities (Part One of Two)” (May 3, 2017); Part Two (May 17, 2017).

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