SEC Chairman Jay Clayton testified before the Senate Banking Committee, on a hearing entitled “Oversight of the U.S. Securities and Exchange Commission.” In his testimony, Mr. Clayton addressed key issues relating to cybersecurity and the SEC’s 2016 intrusion, amongst other matters.
Chairman Clayton's continued transparency in disclosing and discussing details about the 2016 cybersecurity breach is encouraging. By asking the Office of the Inspector General to look into what led to the intrusion, the potential scope of compromised information and the SEC's response, Chairman Clayton is asking the same types of questions that the agency asks its regulated entities to consider. Asking a third party to lead the review at the same time that it is adding resources to combat cyber threats will instill confidence that, whatever vulnerabilities it may have, the SEC gets it—it can be no less vigilant with its own systems than it is with the systems of those it regulates. And how it reacts when breaches occur in its own house will set the tone for what it can and should expect from others. - Paulita Pike, Ropes & Gray investment management partner
Read the full testimony here.