Regulatory & Compliance | 12.06.22

Brokers, Advisors Fall Short in Protecting Clients From Identity Theft

by: Mark Schoeff Jr.

Financial firms are failing to establish and follow through on policies and procedures designed to prevent hackers from stealing their clients’ and customers’ personal information, according to a risk alert released by the U.S. Securities and Exchange Commission (SEC). The warning was based on the findings of an examination sweep to monitor compliance with Regulation S-ID, or the Identity Theft Red Flags Rule. The rule requires brokerages and advisory firms to develop and implement an identity theft protection program. SEC exam staff found that some firms failed to determine whether the rule applied to any of their accounts or failed to conduct a reassessment after merging with another firm.

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