The Securities Exchange Commission announced on Wednesday that hackers infiltrated the corporate disclosure database and stole “sensitive and confidential” information. It is presumed that the hackers used the information to make “illicit trades”

The SEC commented that the attack took place in 2016 but it was discovered that some information was compromised last month. According to Reuters the hackers took advantage of a glitch in the test filing component of the system and gained access to the non-public information.

The EDGAR database stores information about corporate disclosures from “earnings to statements on mergers and acquisitions”. The stolen files became a problem now because they can be used for manipulating the equity markets of U.S.

While the SEC reassured that the problem in the system was solved at the moment of occurrence, in 2016, they added that the glitch “may have provided the basis for illicit gain through trading”.

“It is believed the intrusion did not result in unauthorized access to personally identifiable information, jeopardize the operations of the Commission, or result in systemic risk,” The SEC

In July this year, a monitoring office released a warning in regard with SEC in which it stated that the regulator put itself “at unnecessary risk of compromise” due to the lack of security in its informational system. In addition to that, the Government Accountability Office blamed the regulator that it did not always encrypt sensitive files, used unsupported software and also had a weak firewall.

Ironically, Jay Clayton the leader of SEC put cyber-crime on top of his agenda. The question is, were there other unknown breaches in the system? And if there were what will SEC do to protect the investors and the financial markets?

While cyber-attacks are not new in the financial industry the securities industry rules are stating that all the companies have to disclose any eventual infiltrations. In this case, SEC is cornered because it did not disclose the attack in 2016