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A pair of top U.S. regulators called for increased attention to cyber risks to the financial system Tuesday in the wake of the hack of the Securities and Exchange Commission’s corporate filing system, the Wall Street Journal reported today. Federal Reserve Governor Jerome Powell and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo both cited cybersecurity as a fundamental risk point for the financial sector during a discussion at George Washington University Law School. In a broad conversation on financial regulation, they both also expressed confidence that they would make progress modifying the Volcker rule trading ban and other financial rules. Giancarlo said that the SEC hack raises questions about how much proprietary data should be held by market regulators. Since the 2016 hack was disclosed in September, companies have raised concerns about giving over closely held data such as trading source code to government regulators. The concerns threaten to trip up implementation of the SEC’s consolidated audit trail rule, which would keep track of every trade and order in U.S. stock and option markets, as well as efforts by the CFTC to expand regulators’ access to the computer code that drives automated trading strategies and bring more high-frequency traders under their oversight.

Lynn Tilton, whose aggressive management style made her a success on male-dominated Wall Street, won a U.S. Securities and Exchange Commission trial she’d spent months fighting to avoid, Bloomberg News reported yesterday. SEC administrative law judge Carol Fox Foelak ruled in favor of Tilton over allegations that she and her firm, Patriarch Partners LLC, bilked investors out of more than $200 million. “It is concluded that the violations” alleged by the SEC are “unproven,” Foelak wrote in her ruling issued Wednesday. “Thus, the proceeding will be dismissed.” The decision follows a three-week trial that ended last November. Tilton, who repeatedly argued that the SEC’s internal legal process is unfair to defendants, went all the way to the U.S. Supreme Court in her unsuccessful efforts to have the case heard in federal court, rather than before an SEC administrative judge.

The chairman of the Securities and Exchange Commission is expected to say Tuesday that his agency may have mishandled a breach of its system for disclosing market-moving news and promise to intensify how it defends itself against hackers, the Wall Street Journal reported today. Facing his first crisis as the SEC’s chairman, Jay Clayton suggested in testimony prepared for a Senate hearing today that not enough was done under his predecessor, former chairman Mary Jo White, to size up a 2016 breach that might have provided the basis for insider trading. The SEC’s handling of the hack — which was disclosed in an unusual and lengthy evening statement last Wednesday — is likely to generate tough questions from senators who already face distress calls from constituents over the hacker attack on Equifax Inc., from which intruders ransacked vast troves of personal information, including social security numbers.

Many of the most senior officials at the Securities and Exchange Commission remained unaware of a 2016 hack of the agency’s computer system for months after it occurred, raising questions about how the breach was initially handled, the Wall Street Journal reported today. The SEC’s new chairman, Jay Clayton, uncovered the extent of the hack only after he launched a wholesale review of the agency’s cybersecurity vulnerabilities in the spring, according to a statement he released this week. The SEC’s other commissioners learned about the hack in recent days. A former chief operating officer wasn’t told about the intrusion when it was detected last year. The pace of discovery and the way that information was disclosed is likely to increase scrutiny of an agency that in recent years has pushed financial firms to gird against attacks and urged public companies to tell shareholders about the risks of cyberintrusions.

The top securities regulator in the U.S. said yesterday that its computer system had been hacked last year, giving the attackers private information that could have been exploited for trading, the New York Times reported today. The Securities and Exchange Commission said that it was still investigating the breach of its corporate filing system. The system, called Edgar, is used by companies to make legally required filings to the agency. The agency said it learned in August that an incident detected last year “was exploited and resulted in access to nonpublic information.” It said that the security vulnerability used in the attack had been patched shortly after it was discovered. The hacking, it said, “may have provided the basis for illicit gain through trading.”

The claim that the Securities and Exchange Commission gets a big boost from bringing enforcement actions before its own administrative law judges has become a matter of lore, at least among the members of the securities defense bar, according to a New York Times commentary today. A decision issued last week by an in-house judge in the case of Barbara Duka, a former Standard & Poor’s ratings service executive, shows that even if there is a benefit, it does not always work to the regulator’s advantage. More important, an issue that has been lurking for almost two years about whether the appointment of these judges was proper under the Constitution looks as if it will come to a head in the Supreme Court’s coming term, according to the commentary.

The White House is expected today to nominate Columbia University law professor Robert Jackson to a vacant slot on the Securities and Exchange Commission, the Wall Street Journal reported. If confirmed, Jackson would fill a Democratic opening at the top U.S. markets regulator. The Wall Street Journal reported in July that the White House was preparing to nominate Jackson. The law requires partisan balance on the five-member commission and the White House has already tapped Hester Peirce, a researcher at the conservative Mercatus Center, to fill a separate, Republican slot. Both nominees will likely advance through the Senate as a bipartisan pair, boosting the likelihood that they both win confirmation this fall. They would join an SEC down to just three members: Democrat Kara Stein, Republican Michael Piwowar, and Jay Clayton, the chairman, who is an independent.

More that 130 class-action securities suits were filed in federal court in the first six months of the year, a historic high, according to data from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse, the Wall Street Journal reported today. The volume, which doesn’t include suits challenging mergers and acquisitions, is higher than in any equivalent period since the Clearinghouse began tracking data in 1996, following the passage of landmark securities-litigation legislation. Under securities laws, investors can sue to recoup losses after a stock drops by proving a company or its employees fraudulently misstated or withheld information that would have been material to buying or selling shares. Industry watchers say the rise is being driven by enterprising plaintiffs’ firms bringing more, arguably weaker cases under the perceived strategy that companies will settle early to make a case go away. Advisers are alerting clients that in the current era, every company, from small-cap to corporate giants, needs a plan for defending against fraud accusations following investor losses.