The recent hack of the US Securities and Exchange Commission's (SEC) X account raises serious questions about the agency's cybersecurity posture. A bombshell report unearthed by Fox Business reveals that just two weeks before the January 9th incident, the SEC received a scathing evaluation from its own Office of Inspector General (OIG).

OIG Report: A Damning Indictment

The December 2023 report, compiled by independent contractor Cotton & Company Assurance and Advisor, painted a grim picture. It concluded that the SEC's cybersecurity program was riddled with weaknesses, leaving it "lacking effective mitigating security weaknesses."

The report outlined a laundry list of critical improvements needed, including updating vulnerability disclosure policies and logging meeting requirements. While the SEC's Chief Information Officer, David Bottom, acknowledged the need for improvement, it appears these measures weren't implemented in time to prevent the attack.

Hacked and Humiliated: The Fallout

Shortly after receiving the scathing OIG report, the SEC found itself the victim of a cyberattack. Hackers gained unauthorized access to the agency's X account, presumably through a SIM-swapping attack, and made a false announcement regarding the approval of a spot Bitcoin ETF. This fraudulent news sent shockwaves through the market, leading to an estimated $90 million in liquidations.

Market Manipulation Concerns and Calls for Accountability

The incident sparked outrage from lawmakers like Congresswoman Anne Wagner, who demanded transparency and accountability from SEC Chair Gensler. The lack of two-factor authentication on the agency's account further highlighted glaring security vulnerabilities.

Unanswered Questions and a Looming Shadow

The SEC has yet to face any repercussions for the hack despite the OIG report's clear warnings. This incident raises serious questions about the agency's ability to safeguard sensitive information and protect investors from potential market manipulation. As investigations continue, one thing remains clear: the SEC needs a major overhaul of its cybersecurity protocols to regain public trust and ensure the integrity of the financial markets.