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US SEC says hackers may have traded using stolen insider information

21 September 2017

The US Securities and Exchange Commission has revealed that its electronic company filings system was hacked past year and the information may have been traded on, writes Dave Michaels for The Wall Street Journal.

Cyber criminals have targeted financial information hubs before - the Hong Kong stock exchange and the Nasdaq stock exchange in NY were targeted by hackers in 2011.

The system, called Edgar, is used by companies to make legally required filings to the agency.

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Washington D.C., September 20, 2017 - SEC Chairman Jay Clayton today issued a statementhighlighting the importance of cybersecurity to the agency and market participants, and detailing the agency's approach to cybersecurity as an organization and as a regulatory body. While the agency says it detected the 2016 hack as it happened, the SEC discovered last month that the hackers may have profited by investing based on insider information stolen during the breach.

The statement said the software was patched quickly after the hack was uncovered in 2016, although the possibility that some may have used it to make illegal profits was only discovered last month.

The system processes around 1.7 million electronic filings a year, while people access about 50 million pages of the documents on any given day. Its EDGAR database houses millions of filings on corporate disclosures ranging from quarterly earnings to statements on mergers and acquisitions. Hackers exploited that vulnerability, resulting in "access to nonpublic information", he said.

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It is not believed that any personally identifiable information or SEC operations were compromised, the agency added.

However, it did not appear this was being performed using illegitimate means of access.

The SEC has scored some victories in tackling cyber criminals in recent years. Through the flaw, the intruders were able to obtain information that hadn't been made public, Clayton said.

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The SEC will continue to investigate the cyberattack and might coordinate with the "appropriate authorities", the statement said.

US SEC says hackers may have traded using stolen insider information