April 23, 2018

SEC: Hack used to make illegal gains

22 September 2017, 12:51 | Yvette Williams

SEC Discloses Hackers Breached Its Filing System

SEC says hack may have led to illegal Wall Street profits

The US Securities and Exchange Commission has revealed hackers gained access to its financial document filing system and may have profited from what they were able to see.

No report yet on the size of the gains, which may have been major.

The SEC said it is investigating the matter and is cooperating with law enforcement. Investors can use the EDGAR system to access more than 50 million pages of disclosure documents.

Hackers may have used information stolen from the USA financial regulator to make "illicit gain" through insider trading, the body's chairman admitted. It said the security vulnerability used in the hack had been patched shortly after it was discovered.

Corporations send a lot of different information through EDGAR: Earnings statements, business developments, and other disclosures that could affect stock prices are all included in its databases.

Weekly scans of government systems by the Department of Homeland Security showed in January that the SEC had critical cyber security weaknesses but that vulnerabilities were worse at three agencies, including the Environmental Protection Agency and the Department of Health and Human Services. The SEC provided little information, so it's still unknown which companies may have been affected or if hackers made a profit.

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The hackers exploited a software glitch in the test filing component of the system to gain access to non-public information, the agency said.

Last week, in response to a reporter's question about the fallout from the recent Equifax hack, Clayton said the agency was working to increase public awareness of the "substantial systemic risks" associated with cybersecurity.

The SEC discussed the 2016 hack in a lengthy statement by Clayton on the agency's cybersecurity efforts. Two years ago it charged a group of mainly US -based stock traders and computer hackers in Ukraine with the theft of thousands of corporate press statements ahead of their public release, resulting in more than $100 million in illegal profit.

It is not believed that any personally identifiable information or SEC operations were compromised, the agency added. "We also must recognize-in both the public and private sectors, including the SEC - that there will be intrusions, and that a key component of cyber risk management is resilience and recovery".

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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