U.S. Securities & Exchange Commission Archives

The Buck Stops Where? Defining Controlling Person Liability

February 13, 2019August 13, 2017 by admin

I. INTRODUCTION

From 1929 to 1933, the securities markets lost half of their value, a startling 20% of the workforce was unemployed, and productivity was 50% less than it had been in previous years. As the United States grappled with the Great Depression, it asked why such catastrophes had happened. It became apparent that the structural flaws of Wall Street—that is, its anemic self-regulation deserved a large part of the blame. Congress sought to implement legislation in the form of the Securities Act of 1933 and Exchange Act of 1934, which would prevent such a catastrophe from ever occurring again. These statutes established liability for those who commit securities fraud, and were designed to restore investor confidence in a badly shaken market. These Acts went even further, however, by creating liability for those who “control” the company behind the scenes. Section 15 of the 1933 Act and Section 20(a) of the 1934 Act established that the...

PBX and Analog Lines Security Assessment

February 9, 2019July 1, 2017 by admin

1 Executive Summary
1.1 Overview
Deloitte & Touche LLP (D&T) was engaged to assist the Office of the Inspector General (OIG) of the Securities and Exchange Commission (SEC) in evaluating the effectiveness of security controls over their telecommunications infrastructure, consisting of the Private Branch Exchange (PBX) and analog telephone lines (fax machines, computer dial-up, etc). The overall objective of the review was to determine the degree of protection the SEC’s existing security controls provide their telecommunications system against “hostile” threats from the public and from within the SEC. The objective was accomplished by performing a two-phased assessment: 1) Manual evaluation of the PBX and 2) Automated and manual evaluation of all identified analog telephone lines. The scope of the review included the SEC headquarters in Washington, DC, and the Operations Center (and Annex) in Alexandria, VA. Testing activities were performed between September 21 and November 19, 1999 at the SEC Headquarters located in Washington, DC and external D&T locations. Analog...