SEC Finds Weak Cloud Security at Some Financial Services Firms

Some investment advisers and brokers aren’t doing enough to protect customer information on their third-party cloud-based data storage systems, the SEC said May 23.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations didn’t identify the firms with problems or reveal how many there are in a new risk alert. OCIE issued the notice after recent examinations in an effort to encourage investment advisers and brokers to review their polices, practices, and procedures.

The office’s examiners found in their recent inspections that many of the firms’ third-party network storage systems had encryption, password protection, and other security ...