New SEC Co-Directors of Enforcement Identify Cyber Threats as the Greatest Threats to Financial Markets

Earlier this year, Securities and Exchange Commission Chairman Jay Clayton appointed Stephanie Avakian and Steven Peikin as co-directors of the SEC’s Enforcement Division.  In an interview with Reuters, Avakian and Peikin expressed particular concern about cyber threats and how the SEC should make cybersecurity an enforcement priority.  According to Peikin, “The greatest threat to our markets right now is the cyber threat… That crosses not just this building, but all over the country.”

The SEC has expanded of investigations relating to cybercrimes.  There also appears to be an increase in incidents of hackers attempting to gain access to brokerage accounts.  In response, the SEC has begun obtaining statistics about cybercrimes to assess market-wide issues.

According to the SEC’s statistics, the more frequent cybercrimes include “stealing information for the purpose of insider trading” and “breaking into accounts to either steal assets, trade against them or manipulate markets.”  One prominent cybercrime case involved the SEC charging a man from the United Kingdom with breaking into a multitude of accounts and arranging unauthorized trades.  He then traded the same stocks in his accounts and received financial gains.

Peikin, who formerly worked as a federal prosecutor, was previously employed at Sullivan & Cromwell, the same law firm that employed Clayton before he became SEC Chairman.  At Sullivan & Cromwell, Peikin represented clients such as Goldman Sachs and Barclays.  Avakian and Peikin assured that conflicts would not interfere with the enforcement division’s actions, in response to concerns that Clayton’s past work at Sullivan & Cromwell could cause him to be lenient on Wall Street firms.

Avakian has been working at the SEC since June 2014, when she was appointed as deputy head of enforcement.  Prior to June 2014, she worked at the law firm of Wilmer Cutler Pickering Hale and Dorr LLP.  Prior to that, she was employed as an investigator and counsel at the SEC from 1995 to 1999.

Avakian stated in the same interview that she expects cyber threats to continue to unfold.  Both she and Peikin also stated that SEC enforcement actions will remain “vigorous.”


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