U.S. SEC Enforcing Cyber-threats

On 25 September, SEC issued enforcement initiatives against cyber-threats.

  • Two enforcement initiatives address cyber-based threats, protect retail investors.
  • By the creation of SEC cyber unit to focus on targeting cyber-related misconduct.
  • Establish retail strategy task force for schemes directly affecting retail investors.
  • Followed SEC chairman 20 September statement of a cybersecurity breach.

Cyber Unit

  • Cyber unit to focus enforcement division on targeting cyber-related misconduct.
  • On market manipulation, false information spread BY electronic or social media.
  • Hacking of material nonpublic information; misconduct perpetrated in dark web.
  • Violation involving use of distributed ledger technology and initial coin offerings.
  • Intrusions into retail brokerage accounts, which exposure client assets and data.
  • Cyber-related threats to trading platforms or other critical market infrastructure.
  • Unit complements initiatives to implement SEC internal cybersecurity risk profile.
  • Cyber work group will coordinate information-sharing, risk monitoring, response.
  • Robert Cohen has been appointed chief, has been co-chiefs of market abuse unit.

Retail Task Force

  • Retail strategy task force to utilize proactive, targeted initiatives on misconduct.
  • Aimed to identify and prevent large-scale misconduct that affecting retail investors.
  • SEC enforcement has history of bringing cases for fraud targeting retail investors.
  • On sale of unsuitable structured products, to microcap pump-and-dump schemes.
  • Task force apply lessons from cases, also leverage data analytics and technology.
  • Utilizing enforcement personnel from around country, work with staff across SEC.
  • Including SEC national exam program and office of investor education, advocacy.