Who was the better butler? Michael Caine, Jeremy Irons, or the SEC? I’ll give you a clue, it isn’t the last one. Turns out the SEC’s EDGAR system was hacked last year, and we are just now hearing about it. Read to find out the details.
Edgar is a name you might associate with your grandpa, or an English butler. Maybe it’s the name of your grandfather’s English bulldog who he dressed as a butler for Halloween. (In response to the first question, I prefer the Michael Caine Alfred more than the Jeremy Irons Alfred, but that’s just my opinion.) In America, it’s an acronym for Electronic Data Gathering, Analysis, and Retrieval system. Companies use this to file reports with the SEC (Securities and Exchange Commission). The only problem is that is was hacked.
This isn’t the first time that the SEC has had cyber troubles. They have seen their fair share of cyber crime, and as the government authority on investments and markets, they know how much money is lost due to inadequate cyber security. Well, maybe they are just now learning their lesson.
The EDGAR hacking actually happened a while ago, but the SEC just announced it this past week. A while ago might be an understatement, since it actually happened in 2016. Fake reports starting coming out, with different companies reflecting higher prices than actuality, including Avon, and Rocky Mountain Chocolate Co. Jay Clayton, Chairman of the SEC, will testify before the Senate Banking Committee today.
My initial thoughts are, “How much are shares of Rocky Mountain Chocolate Factory, and do they pay their dividends in chocolate?”. I’m sure Jay Clayton was thinking the same thing, since he himself supposedly only learned of the hack just now. He was instated as the Chairman in May, so all this is still pretty new to him. The SEC hired two new co-directors of Enforcement back in June, so maybe it’s just getting used to the office?
Whatever the situation may be, it’s starting to get embarrassing. I hope the SEC starts to step up their game. So far, nothing. Last Wednesday, Clayton released an official statement regarding the security breach. The hack was based off a software vulnerability that was “exploited and resulted in access to nonpublic information.” Clayton also states that, “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.”
Further in the report, it was stated that “It is believed the intrusion did not result in unauthorized access to personally identifiable information, jeopardize the operations of the Commission, or result in systemic risk.” However, the possibility of illegal profit as a result of the illicit information has not yet been ruled out. I think I would take it very personally if I was Rocky Mountain Chocolate Factory.
Our investments deserve to be safe, and trades need to be secure, and the SEC has a very real responsibility to make that happen. It’s time to get serious about cyber security. Stephanie Avakian, Co-Director of Enforcement stated that cyber threats are more pressing, and the SEC would be fighting harder than ever to make that happen. Well, we’re waiting.