A recent SEC settlement has again demonstrated the Commission’s continued attention to public companies’ disclosures of cybersecurity incidents and its commitment to a broad notion of what constitutes such an incident. On August 16, the SEC entered a settlement agreement with Pearson plc, a UK-based educational publishing company that is publicly traded on both the

Article29On September 15, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) issued a risk alert regarding its recent observation of growing “credential stuffing” attacks against SEC-registered investment advisers and broker-dealers (“firms”). These attacks use compromised usernames and passwords from the dark web to access investors’ accounts. The increase in credential stuffing exploits presents considerable financial, legal, and reputational risks. OCIE’s alert encourages firms to consider various mitigation efforts to reduce the risk of credential stuffing, particularly the use of multi-factor authentication (MFA).  Although the alert is phrase as encouragement, OCIE is certainly suggesting that the industry standard should be for firms to protect against these attacks, even those these attack stem primarily from a client’s behavior in re-using username/password combination and another website’s loss of that combination.
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Digital LockThe SEC’s Office of Compliance Inspections and Examinations (OCIE) released a Risk Alert related to Ransomware on July 10, 2020. In the publication, Cybersecurity: Ransomware Alert, OCIE alerts companies to the increase in sophisticated campaigns orchestrated to invade financial institution networks in order to obtain confidential information and plant ransomware. The attacks generally involve perpetrators using “phishing and other campaigns designed to penetrate financial institution networks … to access internal resources and deploy ransomware.” Once the ransomware is deployed, institutions typically lose control of the ability to use and maintain the integrity of their systems and data until they pay a ransom to the attackers.
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