Cybersecurity Policy Report, Cyber Enforcement Efforts Downsized, Refocused at SEC, (Feb 20, 2025)
The Securities and Exchange Commission is trimming and refocusing a unit devoted to enforcement of cyber risk disclosure rules and monitoring emerging technologies.
The commission has formed a Cyber and Emerging Technologies Unit (CETU) “to focus on combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space,” it said today in a news release.
The CETU will replace a Crypto Assets and Cyber Unit formed in 2017, which grew under former SEC Chair Gary Gensler to include a 50-person staff (CPR, May 3, 2022). The new CETU will instead have “approximately 30 fraud specialists and attorneys across multiple SEC offices,” the commission said.
“Specifically, the CETU will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct as it relates to securities transactions,” it said.
The SEC said the unit would focus on (1) fraud committed using artificial intelligence and other emerging technologies; (2) use of social media, the dark web, or false websites to perpetrate fraud; (3) hacking to obtain nonpublic information; (4) takeovers of retail brokerage accounts; (5) fraud involving blockchain technology and crypto assets; (6) regulated entities’ compliance with cybersecurity rules and regulations; and (7) fraudulent corporate disclosures relating to cybersecurity.
The unit will be led by Laura D’Allaird, who was co-chief of the former Crypto Assets and Cyber Unit.
“Under Laura’s leadership, this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. Importantly, the new unit will also allow the SEC to deploy enforcement resources judiciously,” said Mark Uyeda, the SEC’s acting chairman.
“The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow,” Mr. Uyeda added. “It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”
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