The SEC has said it was investigating the source of the hack but it did not say when exactly it happened or what sort of non-public data was retrieved. The agency said the attackers had exploited a weakness in part of the EDGAR system and it had "promptly" fixed it.
Cyber Sleuths Needed
Clayton will be grilled on the incident and its aftermath at a hearing by the Senate Banking Committee on Tuesday. In particular, questions are likely about how prepared the SEC was against such an attack and why it waited until now to disclose it.
Securities industry rules require companies to disclose cyber breaches to investors and the SEC has investigated firms over whether they should have reported incidents sooner.
In July, months after the breach was detected, a congressional watchdog office warned that the Wall Street regulator was "at unnecessary risk of compromise" because of deficiencies in its information systems.
The 27-page report by the Government Accountability Office found the SEC did not always fully encrypt sensitive information, used unsupported software, failed to fully implement an intrusion detection system and made missteps in how it configured its firewalls, among other things.
It also shut down a specialized unit on cyber crimes as part of a reorganization in 2010 despite former SEC chair Mary Jo White, in office when the hack occurred, telling Reuters in 2016 that cyber security posed the biggest risk to the U.S. financial system.
"Cyber crimes have continued to spread, thrive and become more innovative. Now, more than ever, the SEC needs a dedicated and specialized corps of cyber sleuths to track down and deter hackers," said Stark, currently president of a cyber consulting firm.
The SEC has scored some victories in tackling cyber criminals. In 2015, the commission unmasked a ring of stock traders and hackers who had accessed company press releases from distributors Marketwire, PR Newswire and Business Wire before the information was made public to make $100 million in illegal profits.
This article was provided by Reuters.