SEC Chair Mary Jo White made it clear that cybersecurity remains the biggest threat facing the financial system.
At the Reuters Financial Regulation Summit in Washington, D.C, White gave a candid assessment of the risk digital attacks pose to Wall Street and voiced her concerns over major financial entities not being prepared to handle the cybersecurity risks in front of them, Reuters reported on Wednesday (May 18).
"What we found, as a general matter so far, is a lot of preparedness, a lot of awareness, but also their policies and procedures are not tailored to their particular risks," she explained.
According to White, the SEC has done sweeps of broker dealers and investment advisers to ensure they are properly defending themselves against cyberattacks and pointing out any vulnerabilities.
"We can't do enough in this sector," she added.
The SEC’s “broken windows” initiative is designed to help address the systemic risk facing the financial system by deterring traders and others from making larger transgressions through a crackdown on small SEC rule violations.
Though some have been critical of this method, White continues to praise the efforts as being a success in taking down instances of “rampant noncompliance.”
As White listed the number of recently completed SEC projects, she noted that the agency is “functioning on all cylinders," Reuters said.
Earlier this week, the SEC released guidance that White described as the "consequential” nature of accounting practices that may mislead investors.
As more companies turn to non-GAAP for earnings reports, they are also allowed to remove particular expenses, such as non-cash costs. Resulting in what some see as a more positive, albeit misleading, picture of that particular company’s profits.
White said the SEC’s guidance identifies the circumstances where the rules allow a company to report earnings using figures that may not comply with GAAP but added that non-GAAP "is not supposed to supplant GAAP and obviously not obscure GAAP.”