Hackers may have profited from insider trading by using stolen confidential information
The US Securities and Exchange Commission was subject to hacking last year, it has disclosed. It said that its database of corporate announcements was breached and cybercriminals may have used the information for profit.
In a statement, SEC chairman Jay Clayton said that last month it had learned that an incident previously detected in 2016 “may have provided the basis for illicit gain through trading”. It added that a software vulnerability in the test filing component of its EDGAR system, which was patched promptly after discovery, was exploited and resulted in access to non-public information.
“Notwithstanding our efforts to protect our systems and manage cybersecurity risk, in certain cases, cyber threat actors have managed to access or misuse our systems,” said Clayton.
“We believe the intrusion did not result in unauthorized access to personally identifiable information, jeopardize the operations of the Commission, or result in systemic risk. Our investigation of this matter is ongoing, however, and we are coordinating with appropriate authorities.”
“Effective management of internal cybersecurity risk is critical to the SEC achieving its mission and to protecting the non-public information that is entrusted to this agency,” SEC Commissioner Michael S. Piwowar said in a statement.
“Cybercriminals could have manipulated the entire stock market and make billions of illicit profit. Ethical investors, including pension and sovereign funds, without the insider information could have lost fortunes as a result,” he said.
“This incident clearly exposes how vulnerable our global financial ecosystem is, and how unprepared we are to fight skyrocketing cybercrime. In the future, we will see a steady fusion of common crime with cyber gangs that jointly may challenge state power and dictate their laws, while law enforcement agencies are catastrophically underfinanced by governments and just don’t have enough resources to tackle global cybercrime.”