SEC Charges JPMorgan, UBS, and TradeStation for Deficiencies Relating to the Prevention of Customer Identity Theft

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SEC Charges JPMorgan, UBS, and TradeStation for Deficiencies Relating to the Prevention of Customer Identity Theft

What happened?

The SEC announced in a press release that it separately charged J.P. Morgan Securities LLC, UBS Financial Services Inc., and TradeStation Securities, Inc. for deficiencies in their programs to prevent customer identity theft, in violation of the SEC’s Identity Theft Red Flags Rule, or Regulation S-ID.

According to the SEC’s orders, from at least January 2017 to October 2019, the firms’ identity theft prevention programs did not include reasonable policies and procedures to identify relevant red flags of identity theft in connection with customer accounts or to incorporate those red flags into their programs. In addition, the SEC’s orders find that the firms’ programs did not include reasonable policies and procedures to respond appropriately to detected identity theft red flags, or to ensure that the programs were updated periodically to reflect changes in identity theft risks to customers.

“Regulation S-ID is designed to help protect investors from the risks of identity theft,” said Carolyn M. Welshhans, Acting Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit. “Today’s actions are reminders that broker-dealers and investment advisers must design and operate identity theft prevention programs that are appropriately tailored to their businesses and update them in response to the increased threat and changing nature of identity theft.”

To read the full press release, click here.

What does this mean for me?

The SEC has continued to increase its focus on ever-changing cybersecurity-related threats across the financial industry. Fairview Cyber specializes in the creation, testing, and maintenance of meaningful cybersecurity programs for financial industry businesses, in compliance with SEC regulations. If your firm requires assistance interpreting and implementing these proposed cybersecurity laws, amendments, recommendations, SEC exam focus areas, or is seeking further guidance on cybersecurity issues, Fairview Cyber can help. Contact us today for more information about our services.

By | 2022-08-02T13:58:40-04:00 Aug 2nd, 2022|News|

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