SEC reveals hackers might have used stolen data for insider trading

SEC Says It Was a Victim of a Computer Hack Last Year

Beyond that there are few details, including why the SEC waited until now to disclose the attack.

The SEC's disclosure comes just two weeks after credit-reporting company Equifax Inc. said it had been a victim of a hack that may have led to the theft of personal data on 143 million Americans.

The Securities and Exchange Commission said in a statement that it was still investigating the breach of its corporate filing system. The test filing portion of EDGAR is used to verify that information submitted through EDGAR is accurate before it is sent on to the SEC and then to the public. "Combining the difficulty of tying together multiple events with the difficulty of knowing what information was accessed means that from a purely cyber and digital forensics perspective, it could be incredibly hard to prove specific trades were tied to compromise at the SEC".

Clayton said that the SEC has experienced cybersecurity vulnerabilities before, including an incident in 2014 when the inspector general found that certain SEC laptops that may have contained nonpublic information could not be located, and found instances in which SEC employees transmitted nonpublic information through nonsecure personal email accounts.

While the "incident" had been detected when it occurred in 2016, an internal audit ordered by Chairman Clayton discovered this August that nonpublic information was disclosed that could have been used by someone to gain an advantage in stock transactions.

U.S. President Donald Trump in May signed an executive order requiring agencies to use a specific framework to assess and manage cyber risk, and to prepare a report within 90 days about how they implement it. The SEC chairman said this breach did not result in exposing "personally identifiable information".

Although the SEC "promptly" patched the vulnerability after detecting it in 2016, the regulator only became aware last month that the glitch "may have provided the basis for illicit gain through trading", it said.

But as one of the world's largest collectors of sensitive information, America's federal government is a major target for hackers from both the private sector and foreign governments.

"Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic", he said. "We must be vigilant".

SEC Chairman Jay Clayton gave members of Congress a "courtesy call" about the hack on Wednesday afternoon before it was announced publicly, said Representative Bill Huizenga, chairman of the U.S. House subcommittee that oversees the SEC.

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