Category: Cybersecurity


SEC Charges Investment Adviser with Failure to Adopt Proper Cybersecurity Policies and Procedures Prior to Cyberattack

Posted on September 24th, by in Cybersecurity, OCIE, Office of Compliance Inspections and Examinations. Comments Off on SEC Charges Investment Adviser with Failure to Adopt Proper Cybersecurity Policies and Procedures Prior to Cyberattack

On Tuesday, September 22, 2015, the SEC charged an investment adviser with failing to adopt a written policy and procedure reasonably designed to safeguard customer records and information. The charge spawned from a July 2013 cyberattack on the investment adviser’s third party-hosted server, which potentially compromised the personally identifiable information (“PII”) of over 100,000 individuals stored on the server. Without admitting or denying the SEC’s findings, the investment adviser has agreed to settle the charge for approximately $75,000 and cease and desist from committing or causing any future violations of the SEC’s “Safeguards Rule.”

Rule 30(a) of Regulation S-P (the “Safeguards Rule”) requires every investment adviser registered with the SEC to adopt written policies and procedures reasonably designed to safeguard customer records and information. Specifically, the policies and procedures must be reasonably designed to: (1) insure the security and confidentiality of … Read More »


SEC to Examine Registered Broker-Dealers’ and Investment Advisers’ Procedures for Countering Cybersecurity Threats

Posted on April 28th, by , , and in Cybersecurity, Office of Compliance Inspections and Examinations, SEC Guidance. Comments Off on SEC to Examine Registered Broker-Dealers’ and Investment Advisers’ Procedures for Countering Cybersecurity Threats

Background and Purposes

On April 15, 2014, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a “Risk Alert” explaining a new initiative to assess cybersecurity preparedness in the securities industry.  Although not an official rule, regulation or statement of the SEC, the Risk Alert advised that OCIE will be conducting examinations of more than 50 registered broker-dealers and registered investment advisers, regarding their cybersecurity and data security procedures and policies.

OCIE’s cybersecurity initiative is designed to obtain information about the industry’s recent experiences with certain types of cyber threats.  The examinations will focus on the following topics: the firm’s cybersecurity governance, identification and assessment of cybersecurity risks, protection of networks and information, risks associated with remote customer access and funds transfer requests, risks associated with vendors and other third parties, detection of unauthorized activity, and experiences with … Read More »




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