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SEC Cyber-Security Sweep: Good News, Bad News

In the wake of the SEC's cyber security examinations and a subsequent report, three causes for celebration and three serious action items have emerged from the SEC's recent cyber security examinations. These illustrate where the financial services industry should focus its information security efforts.
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The SEC's Office of Compliance Inspections and Examinations (OCIE) issued a risk alert on Feb. 3 detailing the results of its "Cyber Security Examination Sweep." As part of OCIE's Cyber Security Examination Initiative, adopted last year, OCIE staffers conducted sweeping examinations of a small sampling of SEC-registered financial services – specifically, 57 broker-dealers (representing fewer than 2% of all SEC-registered broker-dealers) and 49 investment advisers (representing fewer than 1% percent of all SEC-registered investment advisers). These examinations took place in 2013 and 2014.

[4 Hot Mobile Banking Security Developments]

In addition to collecting information on each firm's cyber security risk and governance, OCIE staff surveyed key employees on their respective firms' cyber security history and practices. The purpose of the Sweep, in part, appears to have been to establish an informational baseline for the US financial services industry – while signaling to private and public sector alike just how much work is left to be done. The results of the Sweep were decidedly mixed. There is plenty of cyber security awareness, education, and improvement needed in the financial services sector. Still, the results are not all bad; the findings show that there may be hope for the industry yet.

On the following pages, we break down the best of the good news, and the worst of the bad news, from the OCIE's examination.

 

Joe Stanganelli is founder and principal of Beacon Hill Law, a Boston-based general practice law firm. His expertise on legal topics has been sought for several major publications, including US News and World Report and Personal Real Estate Investor Magazine. Joe is also ... View Full Bio

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EmilyAmber
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EmilyAmber,
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2/23/2015 | 10:24:15 AM
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Arda Jeff,
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3/24/2016 | 5:25:38 AM
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directseo
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directseo,
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12/10/2016 | 7:07:24 AM
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hanshenriksen,
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5/19/2015 | 5:05:02 AM
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Blog Voyage
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Blog Voyage,
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7/6/2015 | 2:44:40 AM
Thanks for the job
Just a short message to thank you from France. Your stuff is easily understable for me.
IndraD963
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IndraD963,
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8/28/2017 | 2:11:52 AM
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suhasuseless
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suhasuseless,
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7/22/2015 | 11:48:04 AM
awesome
really awesome this site
srreeee
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srreeee,
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7/23/2015 | 2:46:35 AM
Re: awesome
nice one
DorisG987
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DorisG987,
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9/2/2015 | 1:37:51 AM
Going beyond the SEC's action
Ashley Madison has been served with a US $578 million lawsuit following a breach that resulted in data concerning 39 million of its members being leaked online, including usernames, messages and email and home addresses. If that raises your organization's alarms, meet Edgar Perez, author of The Speed Traders and Knightmare on Wall Street, and course director of Cybersecurity Boardroom Workshop 2015 in New York City, London, Dubai, Bangkok, Jakarta, Sydney, Taipei, Seoul and Tokyo. 
Cerber 5
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Cerber 5,
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12/13/2016 | 4:08:31 AM
Re: Cerber 5
Ransomware attacks turned data encryption to really BAD news
Row3n
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Row3n,
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12/14/2016 | 10:06:01 PM
Re: Cerber 5
I'm surprised that the financial companies in the States need to be informed that they need to have such security and due diligence methods put into place. As if the threat of cyber attack and the leakage of information on the internet isn't a scary thought enough, do we really need the threat of a fine to get people to jump into protecting their customers?
Wallet
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Wallet,
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12/15/2016 | 8:00:29 AM
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Crypt0L0cker
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Crypt0L0cker,
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1/3/2017 | 10:57:40 AM
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