SEC's Examination Function Warns Its Registrants Of Risks Associated With Dangerous Malware

Key Points

• In the age of broad corporate teleworking brought on by COVID-19, OCIE of the SEC has observed during recent examinations that investment advisers, broker-dealers and investment companies are subject to an increased threat of ransomware attacks.
• In a July 10 Risk Alert, the latest in its series of cybersecurity-related alerts, OCIE highlights several practices and procedures that it suggests may limit or prevent exposure to ransomware and other information security vulnerabilities.
• This Risk Alert follows on the heels of another alert issued by OCIE on June 23, 2020, warning RIAs of compliance deficiencies observed during recent OCIE examinations. Taken together, these Risk Alerts warn of OCIE's expected focus in upcoming examinations, and all SEC registrants should ensure their cybersecurity policies and procedures meet regulatory standards and sufficiently protect against the growing threat of ransomware that OCIE has observed.