The Securities and Exchange Commission (SEC), in reaction mode following a major hack and poor communications about the breach, today unveiled two initiatives to restore investor confidence in the commission. The moves include a new Cyber Unit and the establishment of a retail strategy task force to safeguard retail investors, the SEC said.
The Cyber Unit, the SEC said, will focus on discovering and preventing:
- Market manipulation schemes involving false information spread through electronic and social media;
- Hacking to obtain material nonpublic information;
- Violations involving distributed ledger technology and initial coin offerings;
- Misconduct perpetrated using the dark web;
- Intrusions into retail brokerage accounts; and
- Cyber-related threats to trading platforms and other critical market infrastructure.
The SEC says the unit has been "in the planning stages for months," though that may do little to ease concerns about a 2016 SEC hack coupled with early 2017 concerns raised by the U.S. Department of Homeland Security.
Robert A. Cohen has been appointed Chief of the SEC's new Cyber Unit. Since 2015, he and Joseph Sansone have been Co-Chiefs of the Market Abuse Unit. Sansone will continue to lead the Market Abuse Unit as its Chief.
Retail Strategy Task Force
Meanwhile, the Retail Strategy Task Force will develop proactive, targeted initiatives to identify misconduct impacting retail investors, the SEC says.
The SEC insists that the Enforcement Division has a "long and successful history of bringing cases involving fraud targeting retail investors, from everything involving the sale of unsuitable structured products to microcap pump-and-dump schemes."
Still, the SEC's reputation was bruised in recent weeks. And the fallout may continue Tuesday, Sept. 26. That's when SEC Chairman Jay Clayton is expected to tell a Senate Banking Committee hearing that he belatedly found out about an SEC hack in August -- about three months after the hack was confirmed by SEC employees, Reuters says.
