The United States Securities and Exchange Commission (SEC) has unveiled two new initiatives in an effort to counter digital threats.
On 25 September, the independent agency of the U.S. government articulated its ongoing commitment to protect retail investors against digital-based threats. It hopes to leverage two newly created initiatives to achieve that purpose. Both processes will operate under the SEC’s Enforcement Division.
The first initiative is a “Cyber Unit” that will share information, monitor risk, and lead the agency’s incident response efforts against instances of digital misconduct. Those cases include market manipulation schemes and misconduct perpetrated on the dark web. They also include hacking in order to access nonpublic information, a type of intrusion which the SEC detected against its EDGAR corporate filing system back in 2016 and now believes might have spurred insider trading.
Stephanie Avakian, co-director of the agency’s Enforcement Division, has high hopes for the Cyber Unit. As quoted in a statement released by the Securities and Exchange Commission:
“Cyber-related threats and misconduct are among the greatest risks facing investors and the securities industry. The Cyber Unit will enhance our ability to detect and investigate cyber threats through increasing expertise in an area of critical national importance.”
The second initiative is a “Retail Strategy Task Force” that will help identify instances of misconduct targeting retail investors. It will consist of law enforcement personnel around the United States as well as SEC staff members. Together, these individuals will use data analytics, technology solutions, and their combined expertise to keep investors safe.
Both the Cyber Unit and Retail Strategy Task Force will hopefully better protect retail investors against digital threats. But the buck doesn’t stop at the SEC. Investment firms and other financial services organizations should also work to bolster their own digital security defenses. They can do so by continuing to direct their attention to security instead of just compliance and by automating their threat detection processes.
For information on how your financial services company can defend against digital threats, click here.