Why Cybersecurity Matters for Investment Advisors

Stark & Stark Shareholder Cary S. Kvitka and Associate Max L. Schatzow, both members of the Securities Group, co-authored the article, “Why Cybersecurity Matters for Investment Advisors,” which was published in the July/August issue of the Investments Wealth Monitor.

The article explains the recent push for investment advisors to increase cybersecurity prevention by the Securities and Exchange Commission (SEC). Between 2012 and 2013, several banking websites were disabled by hackers, leading to the eventual enactment of Executive Order 13636, “Improving Critical Infrastructure Cybersecurity.” This order is designed as an “attempt to improve the nation’s infrastructure to prevent and detect cyber risk by keying in on critical participants in the U.S. economy and requesting that they adopt comprehensive cybersecurity practices.” Additionally, the National Institute for Standards & Technology (NIST) was appointed to oversee and develop what would eventually become the “voluntary cybersecurity framework.”

The design of NIST’s framework is broken into three sections: the Core, the Tiers and the Profile. The Core provides guidance for creating an organizational profile for a business, as well as outlining options for putting together cybersecurity agendas. The Tiers, or Implementation Tiers, are a series of four designations, or “tiers,” that characterize a business’ practices, which will help inform the best possible cybersecurity plan necessary. Finally, the Profile is the grading system that a business can use to compare its current cybersecurity process against its planned one.

Mr. Kvitka and Mr. Schatzow strongly encouraged any investment advisors without a cybersecurity process in place to begin the steps to implementing one.

You can read the article in its entirety by clicking here.

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