SEC Urges Public Companies To Develop Internal Controls Against Cyber-Related Fraud

The SEC urged public companies to implement internal accounting controls capable of preventing cyber-related fraud.

In a new report, the SEC outlined the findings of an investigation into nine public companies that fell victim to cyber fraud. According to the SEC, some of the fraud involved company personnel sending large payments to fraudsters after receiving spoofed or manipulated electronic communications that appeared to come from either a company executive or a vendor. While the SEC said it is not pursuing enforcement action in these matters, it advised public companies and other market participants to ensure that their systems of internal accounting controls address cyber-related threats. Although cyber-related threats are "relatively new," the SEC warned, public companies should always be reviewing and updating their internal accounting controls to address such threats.