In light of the recent hack of Equifax, a major credit reporting agency, the Security and Exchange Commission is now also under investigation for a 2016 hack of their Electronic Data Gathering, Analysis, and Retrieval System, also known as EDGAR. Equifax put 143 million American’s sensitive and private information at risk once its security system was breached earlier in the past week; however, in terms of the Security and Exchange Commission, hackers could potentially make trades that would equate to illegal insider trading with the information gained from the EDGAR system. Cybersecurity has been one of the most difficult issues to manage effectively through public institutions and large agencies are now investing more into online security to prevent additional data breaches.
Furthermore, the point of discovery and disclosure of information were not handled correctly, which draws more attention to the lack of transparency in the large, complex structure of data reporting institutions. Though financial firms have recently been encouraged to guard against such attacks and inform shareholders of the possibility of cyber intrusion, the question of how leaked information could potentially affect the markets remains unanswered in many cases.
Cybersecurity is a particularly challenging issue to address due to the unknown total damages caused by such a breach and wariness regarding what actions to take after the information has been made public. The new SEC chairman, Jay Clayton, has issued a lengthy statement regarding information about the hack and the resulting new cybersecurity program’s release at 8 pm on Wednesday.
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