Retail investors afforded greater protection from cyber threats
Increased detection and pursuit of fraudulent conduct.
Two new security groups, a cyber unit and retail strategy task force, have been established to combat the growing threat of cyber crime violations and misconduct and better protect retail investors.
The Securities and Exchange Commission (SEC) established these two new divisions, which have been in the planning stages for months, to help detect and investigate cyber threats through increasing expertise.
The cyber unit will target market manipulation schemes involving false information distributed online via email and social media. The team will also monitor misconduct perpetrated on the dark web and confront hackers seeking to obtain material nonpublic information, while also aiming to deter violations involving distributed ledger technology and initial coin offerings, pertaining to digital currencies such as bitcoin.
The unit will also coordinate information sharing among agencies, monitor intrusions into retail brokerage accounts and combat cyber-related threats to trading platforms and other critical market infrastructure.
The SEC said that over the past several years, its enforcement division has developed a significant level of expertise in the detection and pursuit of fraudulent conduct amidst an evolving, data-driven landscape.
The commission’s new retail strategy task force will establish resources to more usefully identify any large-scale misconduct affecting retail investors, bringing cases against those deemed to be breaking the law.
Until now, the SEC’s enforcement division has been wholly responsible for these types of prosecution cases, ranging from the sale of unsuitable structured products to microcap pump-and-dump schemes.
SEC enforcement division co-director Steven Peikin said protecting the Main Street investor is a keen priority.
“By dedicating additional resources and expertise to developing strategies to address misconduct that victimizes retail investors, the division will better protect our most vulnerable market participants,” he said.
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