The SEC Hack Shows That Not Even Top Government Data Is Safe

A major computer hack at America’s top stock market regulator is the latest sign that data stored in the highest reaches of the U.S. government remains vulnerable to cyber attacks, despite efforts across multiple presidencies to limit high-profile breaches that are so frequent many consider them routine.

In recent years, nation-state and criminal hackers, as well as rogue employees, have stolen data from the Internal Revenue Service, the State Department and intelligence agencies, including millions of government employee files allegedly exfiltrated by the Chinese military, U.S. officials say.

The Sec urities and Exchange Commission ( SEC ), America’s chief stock market regulator, said on Wednesday that cyber criminals may have used data stolen last year to make money in the stock market, making it the latest federal agency to grab headlines for losing control of its data.

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At the same time, being only the latest major breach is not special, said Dan Guido, chief executive of Trail of Bits, which does cyber sec urity consulting for the U.S. government.

“It simply reflects the status quo of our digital sec urity,” said Guido, who is a former member of the cyber sec urity team at the Federal Reserve, America’s central bank.

Central bank officials have detected dozens of cases of cyber breaches, including several in 2012 that were described internally as “espionage.”

The U.S. federal government has sharply increased funding dedicated to protecting its own digital systems over the last several years, attempting to counter what is widely viewed as a worsening national sec urity liability.

But as one of the world’s largest collectors of sensitive information, America’s federal government is a major target for hackers from both the private sec tor and foreign governments.

“When you have one central repository for all this information – man, that’s a target,” said Republican Representative Bill Huizenga, chairman of the House subcommittee on Capital Markets, Sec urities, and Investment, which oversees the SEC .

Last year, U.S. federal, state and local government agencies ranked in last place in cyber sec urity when compared against 17 major private industries, including transportation, retail and healthcare, according to benchmarking firm Sec urityScorecard.

An update of the rankings in August showed the U.S. government had improved to third worst, ahead of only telecommunications and education.

“We also must recognize – in both the public and private sec tors, including the SEC – that there will be intrusions, and that a key component of cyber risk management is resilience and recovery,” said SEC Chairman Jay Clayton.

The federal government audits cyber sec urity measures every year at top agencies, producing reports that routinely expose shortfalls and sometimes major breaches. The Federal Bureau of Investigation also looks for hacking attempts and helped spot an alleged intrusion by Chinese military-backed hackers into a major banking regulator between 2010 and 2013.

Weekly scans of government systems by the Department of Homeland Sec urity showed in January that the SEC had critical cyber sec urity weaknesses but that vulnerabilities were worse at three agencies, including the Environmental Protection Agency, the Department of Health and Human Services and the General Services Administration.

Some agencies said they had improved their cyber sec urity posture since that report.

For more about cybersecurity, see Fortune’s video:

A GSA spokeswoman said the agency has not had any critical vulnerabilities in the past six months, and that the ones identified in January were patched in under 10 days.

A Department of Labor spokesman said all identified vulnerabilities had been fixed and that its systems were not compromised by the identified flaws.

But, he added, “addressing vulnerabilities associated with legacy systems can be challenging.”

Tech

Microsoft sues US government over secret requests for user data

Microsoft has sued the U.S. government in an attempt to strike down a law allowing judges to gag tech companies when law enforcement agencies want access to their users’ data.

The lawsuit, filed Thursday in the U.S. District Court for the Western District of Washington, argues that a section of the Electronic Communications Privacy Act is unconstitutional for requiring tech companies to keep requests for data under wraps. 

Microsoft argued the law is unconstitutional under the First Amendment, by limiting the company’s freedom of speech, as well as under the Fourth Amendment’s due process protections. 

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The Presidential Choice Of Daley To Focus Other Officials Towards Economy

Obama Choice of Daley to Focus Staff on Economy. Yes, President Barack Obama announced the appointment of Bill Daley as the new White House chief of staff. He is sixty-two years of age and will take charge of talking to the media as representative of President Obama, especially about economic matters. He has a background in politics as the son of Richard J. Daley, the man who was mayor of Chicago for twenty-one years. His brother, Richard now serves as mayor of Chicago.

His experience as a member on the executive committee for JPMorgan Chase & Co., chairman of the election committee for Al Gore when he made his run for the White House and position on the board of directors of Boeing prepared him for this challenging position.

Gene Sperling is appointed by the president to lead the National Economic Council. He has served in that position before. When Bill Clinton was president, Sperling held the same position. One of the things he fought for at that time was raising the visas issued to 195,000 as a maximum. Currently the maximum is 85,000. This H-IB visa gave an advantage to businesses that did offshore outsourcing.

That had the unfortunate effect of shipping American jobs overseas. It will be interesting to see how Sperling now handles this H-IB visa situation. He must find a solution that will be amicable to the U. S. Labor Department as well as businesses concerned with outsourcing.

Secretary Timothy Geithner, as leader of the National Economic Council, will concentrate on improving the economic recovery. His background as an economist and banker precedes his career as a civil servant. He has also served as President of the Federal Reserve Bank of New York.

He will deal with restructuring the financial system, the recovery of the automobile industry and necessary tax changes. He will negotiate financial issues with foreign country leaders. These three new appointments of Daley, Sperling and Geithner will bring rejuvenation to the economy and address the national debt that is now a staggering amount of money.

Members of Congress, Republicans and Democrats alike, are familiar with Sperling and Daley. They are also familiar with big business and labor groups. An anonymous source reported that these working relationships are good. For example, Daley received endorsement from the U. S. Chamber of Commerce and the Business Roundtable in D. C.

Daley was described as a potentially beneficial chief of staff by Senate Republican leader, Mitch McConnel. He praised his experience in corporate America. His position as president of SBC Communications and member of the executive directors board at Boeing were both successful. He has been at JPMorgan since 2007. On the detrimental side, he was a board member of Fannie Mae, which is responsible for many people losing their homes to foreclosure. Fannie Mae and Freddie Mac approved ill-advised loans, which led to the mortgage crisis.

It is the expectation that Daley will resign from his position at JPMorgan & Chase. We can expect him to turn his attention to the financial problems at hand. President Obama made a wise choice as far as the opinions of top leaders from both political parties are concerned. He will be elucidating his views on the major news shows to outline a workable plan to deal with jobs and the national debt. Evelia K. Roskovensky

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