SEC Warns Public Companies on Accounting Control Use

The Securities and Exchange Commission (SEC) today issued an investigative report cautioning public companies to keep security threats, specifically business email compromise (BEC), top of mind when employing internal accounting controls.

The report is based on SEC Enforcement Division investigations into nine public companies that lost millions after getting hit with fraud. Analysts focused on BEC attacks, in which attackers pose as company executives or vendors and email employees to trick them into sending money.

In some cases, attacks on these companies lasted months and were only discovered when law enforcement intervened. Each had securities listed on a national stock exchange and lost at least $1 million, though two lost more than $30 million and one lost more than $45 million. The FBI estimates BEC attacks have cost businesses more than $5 billion since 2013.

Stephanie Avakian, co-director of the SEC Enforcement Division, says the SEC did not charge the companies it investigated, but emphasizes the importance of using adequate internal accounting controls and keeping cyberthreats in mind when installing and using them.

Read more details here.

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