In a move to bolster record-keeping and address security vulnerabilities, the U.S. Securities and Exchange Commission (SEC) has banned the use of third-party messaging apps and texting on its employees’ work phones. This decision aligns the SEC’s internal practices with the standards it imposes on the financial industry.
What Happened: The SEC’s new policy follows the imposition of approximately $3 billion in fines on financial firms for inadequate record-keeping of work-related communications on mobile devices and apps like Signal and Meta Platforms Inc.‘s WhatsApp, reported Bloomberg.
Earlier this year, a security breach involving one of the SEC’s social media accounts prompted this decision. The agency has now limited access to third-party messaging applications, including SMS and iMessage texts, to reduce the risk of system compromise and enhance record-keeping, according to an SEC spokeswoman.
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Wall Street has been forced to reconsider how employees communicate on business matters using mobile phones due to this regulatory scrutiny. The Commodity Futures Trading Commission (CFTC) is also reportedly contemplating a similar measure for its staff.
Why It Matters: The SEC’s cybersecurity practices have been under scrutiny in recent months. In January, the regulator’s X account was compromised via a staffer’s agency-issued phone, leading to a fake post that briefly surged the price of Bitcoin BTC/USD. This incident highlighted that even a regulator with an assertive stance on cybersecurity requirements isn’t immune.
For more context, in January, Elon Musk‘s X confirmed the compromise of the SEC’s X account, attributing it to a lack of two-factor authentication.
The SEC later revealed that the fake tweet announcing the approval of spot Bitcoin ETFs was the result of a “SIM swap” attack. The FBI investigated the hack, coordinating with the SEC to probe the matter.
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