May 29, 2024
Senators Demand Report on SEC X Breach
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Senators Demand Report on SEC X Breach

Two U.S. senators, J.D. Vance and Thom Tillis, are urging the Securities and Exchange Commission (SEC) to furnish Congress with a report on the recent security breach of its Twitter account. In a letter to SEC Chair Gary Gensler, the senators expressed “serious concerns” about the incident, deeming it contradictory to the SEC’s mission to protect investors and maintain market integrity. The senators cited the incident’s “widespread confusion” and emphasized the need for the SEC to comply with the recently finalized rulemaking on cybersecurity disclosures.

The letter, dated Jan. 9, set a deadline of Jan. 23 for the SEC to provide the report. It reminded the SEC of the mandate requiring businesses to disclose all impacts of a cybersecurity incident within four days. The incident occurred when the SEC’s Twitter account falsely claimed that spot Bitcoin exchange-traded funds (ETFs) had been approved in the U.S. Subsequently, SEC Chair Gary Gensler clarified that the account was compromised, and the tweet was unauthorized.

“If this ‘compromised’ social media post was indeed a result of a cybersecurity attack, would it be possible for the Commission (SEC) to provide Congress with a report on the breach within four business days? If not, please explain why.”

The senators’ concerns revolve around the SEC’s perceived lack of preparedness against cyber threats. An internal investigation confirmed that the SEC account did not use two-factor authentication during the breach.

Several government officials, including Senators Cynthia Lummis and Bill Hagerty, as well as Representative Ann Wagner, echoed these sentiments. Hagerty called for full disclosure, while Lummis emphasized the risks associated with fraudulent announcements that can manipulate markets.

“Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.”

The senators’ request for a report aligns with increased scrutiny on government agencies and organizations to enhance their cybersecurity measures amid rising cyber threats.

The incident has sparked a broader discussion on the importance of robust cybersecurity practices, especially in entities responsible for overseeing financial markets and protecting investors. The SEC’s response to this request will likely be closely monitored for insights into its cybersecurity protocols and incident response mechanisms.

Image by TravelScape on Freepik

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