{"id":104291,"date":"2017-10-04T13:34:33","date_gmt":"2017-10-04T11:34:33","guid":{"rendered":"http:\/\/www.arabtelegraph.com\/?p=104291"},"modified":"2017-10-04T13:39:04","modified_gmt":"2017-10-04T11:39:04","slug":"104291","status":"publish","type":"post","link":"https:\/\/www.arabtelegraph.com\/?p=104291","title":{"rendered":""},"content":{"rendered":"

\u00a0SEC forensics unit sought resources, cyber training ahead of 2016 hack – memo<\/h1>\n

In August 2016, just two months before the U.S. Securities and Exchange Commission discovered its corporate filing system had been hacked, the SEC\u2019s internal watchdog, Carl Hoecker, received a plea for help from his new forensics investigative unit.<\/strong><\/p>\n

In a three-page memo that was shared with U.S. Congressional staff and seen by Reuters, the head of the forensics unit complained of \u201cserious deficiencies\u201d in equipment, inadequate cyber defense training, and a lack of communication with the SEC\u2019s Office of Information Technology (OIT).<\/p>\n

The forensics unit\u2019s staff were told to use equipment due for disposal when they asked for supplies and ended up repurposing computer hard drives instead. Their hardware budget for the fiscal 2017 year at $100,000 was about half a million dollars short of what was needed, the memo said.<\/p>\n

\u201cEven though the (Digital Forensics and Investigations Unit) has been in existence for over one year, there is no strategic vision and no clear objectives,\u201d it read.<\/p>\n

The concerns in the memo, however, were never addressed, according to sources familiar with the matter, and the Office of the Inspector General (OIG), run by Hoecker, was not notified of the October 2016 breach of the SEC\u2019s corporate filing system known as EGDAR until many months later.<\/p>\n

In August 2017, nearly a year after the hack, the inspector general\u2019s office was asked to review the incident after SEC Chairman Jay Clayton learned about it, according to sources.<\/strong><\/p>\n

Clayton will face questions about the security breach when he testifies before the U.S. House Financial Services Committee on Wednesday.<\/p>\n

He has asked the inspector general\u2019s office to launch a review into the intrusion. What role, if any, that the digital forensics unit will play in that review remains unclear.<\/p>\n

Raphael Kozolchyk, a spokesman for the Office of the Inspector General, did not respond to more than half a dozen requests from Reuters for comment. Hoecker did not respond to an email seeking comment.<\/p>\n

Christopher Carofine, a spokesman for the SEC, declined to comment.<\/p>\n

The SEC has been criticized for the length of time it took to disclose the hack and the delay in uncovering its extent. Its cyber defenses and practices have been questioned in the past, including by auditors inside Hoecker\u2019s office.<\/p>\n

Hoecker created the forensics unit in 2015. Besides assisting with computer forensics on internal criminal and civil probes, the office was also charged with helping to identify \u201cthreats to the SEC\u2019s sensitive information systems\u201d and to provide \u201ccyber security capability,\u201d he told Congress in two public reports in 2015 and 2016.<\/p>\n

The 2016 memo, however, raises questions about the inspector general\u2019s handling of its own forensics unit and whether it could have been in a better position to respond to and investigate the problem when it was first detected in October 2016.<\/p>\n

\u201cWith the recent breach, the SEC and the SEC OIG need to make sure they didn\u2019t overlook any warnings or calls for improvements that might have prevented a breach,\u201d Republican Senator Charles Grassley of Iowa told Reuters in a statement.<\/p>\n

\u201cAn agency that protects the integrity of public securities has to be up to speed on threats and how to prevent them.\u201d<\/p>\n

ENFORCEMENT MUSCLE<\/strong><\/h3>\n

The SEC\u2019s Inspector General\u2019s Office is an independent internal watchdog that is tasked with policing waste, fraud and abuse and is staffed with investigators and auditors.<\/strong><\/p>\n

While the inspector generals at some of the larger government agencies are nominated by the President, the SEC\u2019s inspector general is hired by and answers to the agency\u2019s commissioners.<\/p>\n

Under Hoecker, the SEC\u2019s Inspector General\u2019s Office has undergone a major restructuring.<\/p>\n

Prior to his arrival in 2013, the office\u2019s investigative staff did not have any criminal law enforcement powers and focused primarily on administrative probes involving SEC employees.<\/p>\n

But Hoecker decided to take advantage of a provision in federal law that allows inspector generals\u2019 offices to have law enforcement powers. He hired special agents who can carry firearms, conduct criminal investigations, make arrests and execute search warrants.<\/p>\n

The Digital Forensics and Investigations Unit was part of Hoecker\u2019s plan to have more enforcement muscle so that his office could conduct criminal investigations into hacking and provide forensic support on investigations.<\/p>\n

As part of that vision, the forensics unit proposed conducting a full review of the SEC\u2019s computer network, and wanted to develop a reporting system with the Office of Information Technology to help keep track of all cyber incidents, according to government documents shared with congressional staff.<\/p>\n

Despite that proposal, the inspector general\u2019s office has not received real-time notifications of cyber incidents, according to sources, a public 2017 audit of the SEC\u2019s information security program, and internal government documents seen by Reuters.<\/p>\n

\u201cIt is not uncommon to have a big push to do a cyber security initiative and then have the organization be uncomfortable with the nature and type of initiative people are starting,\u201d said Beau Woods, a cyber security expert with the Atlantic Council.<\/p>\n

\u201cIt sounds like there is either a communications gap, or a leadership gap, or both, where the right information is not getting to the right people.\u201d<\/p>\n

The inspector general\u2019s investigators have done few, if any, probes related to cyber intrusions and most of their investigations, ranging from time and attendance fraud by SEC staffers to ethics violations, have not led to criminal charges despite the efforts to step up the office\u2019s enforcement powers.<\/p>\n

From January 2013 through April 2017, of the 71 cases referred for criminal prosecution<\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0SEC forensics unit sought resources, cyber training ahead of 2016 hack – memo In August 2016, just two months before the U.S. Securities and Exchange Commission discovered its corporate filing system had been hacked, the SEC\u2019s internal watchdog, Carl Hoecker, received a plea for help from his new forensics investigative unit. In a three-page memo …<\/p>\n","protected":false},"author":3,"featured_media":104295,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[36],"tags":[],"class_list":["post-104291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-te-public"],"yoast_head":"\n- Arab Telegraph<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.arabtelegraph.com\/?p=104291\" \/>\n<meta property=\"og:locale\" content=\"ar_AR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"- Arab Telegraph\" \/>\n<meta property=\"og:description\" content=\"\u00a0SEC forensics unit sought resources, cyber training ahead of 2016 hack – memo In August 2016, just two months before the U.S. Securities and Exchange Commission discovered its corporate filing system had been hacked, the SEC\u2019s internal watchdog, Carl Hoecker, received a plea for help from his new forensics investigative unit. 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