The Upcoming SEC and FINRA Cybersecurity Sweeps. Is Your Firm Ready?

Because of all of the sensitive financial information that RIA’s, Broker Dealers and Banks keep regarding their clients, internet security has become a major concern for the wealth management industry. As, hacking techniques are growing more sophisticated, it is hard to tell who could be observing your connection and Internet activity. Due to this cyber-threat the SEC and FINRA will be conducting cybersecurity sweeps of the wealth management industry to make sure you are up to date and taking the latest precautions to protect your clients.

Why Hackers Target RIAs and Financial Firms

Bank account numbers and social security numbers are not the only thing hackers are looking to steal. Many hackers and rogue traders are hijacking trading accounts from financial firms and making unauthorized trades, as well as stealing funds.

How the SEC and FINRA Cybersecurity Sweeps Will Work

The SEC and FINRA are aware of these potential security threats and want the industry to get prepared. They have announced that this year they are planning random sweeps to test the defenses of various firms. If a firm’s cybersecurity is not up to the job, the SEC and FINRA could levy large fines as punishment for the oversight.

The SEC and FINRA will also be checking to see that firms have adequate written policies and measures for cybersecurity, a schedule of periodic tests for weaknesses in the system, and a history of fixing weaknesses in their cybersecurity. If your firm fails in any of these categories, you could be liable for a large fine.

What Your Firm Needs to Do to Prepare

The SEC and FINRA cybersecurity requirements are fairly exhaustive and could catch many firms off guard, especially smaller firms that might not have full-time tech support. If you are worried that you may have a security gap, you could try working with a third party that specializes in this type of compliance. These firms have studied the upcoming requirements and can you give a checklist of the measure you need in place in case of a sweep.

We encourage you to join our free webinar, entitled “Cybersecurity for Financial Services Firms” on July 9th where we will be discussing the procedures you need to get ready. Preparing for the SEC and FINRA cybersecurity sweeps will take some work, but it’s a fraction of the headache of dealing with a serious breach.

Reserve your Webinar seat now at:  https://www1.gotomeeting.com/register/274214880