The SEC was Hacked

The SEC was Hacked

The breach was the result of a software vulnerability in the test filing component of the EDGAR system, an application that stores and allows users to access publicly filed financial regulatory documents, he said.

The SEC says it had known about the intrusion in 2016 into its Edgar filing system, but learned this month that "nonpublic information" accessed may have been used for "illicit gain". The regulator disclosed the intrusion for the first time Wednesday.

Much of the information that flows through EDGAR is released to the public immediately. Through the flaw, the intruders were able to obtain information that hadn't been made public, Clayton said.

The statement from Clayton also mentioned that some SEC laptops that could have stored private data were unable to be located during an internal review of the body in 2014.

Chris Pierson, CSO at electronic payment provider Viewpost, said the SEC breach was especially significant because the SEC's Division of Corporation Finance "spearheaded the requirement that public entities disclose material cybersecurity risks".

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Insider trading, which is essentially what hackers are doing if they're using stolen SEC filings to buy and sell stock, can have a huge effect on the supply and demand of a stock, and thus the price.

The Equifax breach, which focused on a database that contained the personal information of 143 million Americans, focused attention on the vulnerabilities of private companies that handle sensitive personal financial information. The credit reporting agency said hackers infiltrated its system, stealing significant personally identifiable information through a vulnerability in a USA website application.

The US Securities and Exchange Commission has admitted to being hacked in 2016, with illegal trading potentially at the root of the breach. The SEC provided little information, so it's still unknown which companies may have been affected or if hackers made a profit.

The statement is part of an ongoing assessment of the SEC's cybersecurity risk profile that Chairman Clayton initiated upon taking office in May. Nevertheless, Clayton reiterated in his statement, that he aims to "promote effective cybersecurity practices within the Commission itself and with respect to the markets and market participants it oversees".

If sensitive nonpublic information was stolen it may already be too late to fix market damage. Insider trading refers to buying or selling of a stock by a trader who has inside knowledge that the investing public is not aware of, creating an unfair advantage.

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