BREAKING NEWS: THE SEC’S X ACCOUNT HACKED

January 10, 2024

https://www.nytimes.com/2024/01/09/business/sec-x-hack-bitcoin.html

From the desk of Stephen Kohn, Founder and Chair of Financial Professionals Coalition (www.finprocoalition.com) and a 25-year veteran owner of a FINRA broker-dealer, a, former member of FINRA’s National Adjudicatory Council and a Former Governor on FINRA’s Board. 

The Financial Professionals Coalition, Ltd. is a diverse resource for over 1.2 million registered representatives, associated persons, traders, bankers, back-office staff, and owners of broker-dealers and registered investment advisors.  The Coalition provides courtesy consultations with industry experts. Membership is free.

Who polices the police?

With all of the noise the SEC and FINRA have been making about Cyber Security, the SEC itself has been hacked and the hackers post moved the crypto markets, if only for a short time.

Apparently, the Financial Industry cops, touting multi-factor access, failed to practice what they preach; I mean practice what they impose on the industry  they regulate.

This attack exhibits vulnerability at the highest level.  The fact that the hack was discovered and quicky dealt with is meaningless;  THE SEC WAS HACKED.  Kinda knocks the wind out of their sails, wouldn’t ya think?

Now I’m not happy that this happened but forgive me if I gloat for a moment or two.  What’s the lesson?  Get your own house in order before you go about looking for cyber, and other deficiencies and impose big fines on little fish.

My questions are:

• Who’s gonna examine the examiner now and going forward?
• Who’s gonna have the chutzpah to impose a fine and suspension on the regulator that does just that to 3200 firms that the  SEC oversees?
• Who’s gonna smack their wrists as they smack ours?
• What effect will this "lesson" have on Cyber Exams?

What this shows is that nothing, no matter how big or how much authority is bestowed, is invulnerable to hackers intent on electronically breaching the castle walls.

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The Financial Professionals Coalition, Ltd. is a diverse resource for over 1.2 million registered representatives, associated persons, traders, bankers, back-office staff, and owners of broker-dealers and registered investment advisors. The Coalition provides courtesy consultations with industry experts. Membership is free.