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While we focus in the fine levied by the Irish data watch dog, spare a thought for Allianz Global Investors(AGI) U.S.
On the 22nd May 2023 the Securities and Exchange Commission, under the Securities and Exchange Act of 1934 found that AGI US employed a complex options trading strategy known as Structured Alpha that AGI US marketed and sold to investors in various funds, misleading investors. Under section 308(a) of the Sarbanes Oxley act of 2002 AIG have been ordered to pay $349mn disgorgement and a further $675mn in civil money penalty ($1Bn).
Why is this fine maybe important?
1. The use of Section 308 related to ‘Fair Funds for investors, under Corporate Responsibility’.
2. The size of the fine, it’s not much less than the Facebook penalty, and at with a penalty of $675 and $349 is not insignificant. One wonders if this fine is related to the recent SEC Whistleblower payment of $279mn.
3. It’s a demonstration of the fines regime under the SEC. That is often not discussed, moves at a faster pace and severity than data protection law in the aggregate.
If the SEC cyber risk management proposal lands, one wonders the effect on corporate responsibility, regulatory compliance and penalties for non compliance. For a risk that is currently outside the management and control of many covered entities.
Ted Dziekanowski Stephen Pitt-Walker, JD, FGIA Rachel V. Rose, JD, MBA
#securitiesandexchangecommission #cybersecurity #cyberriskmanagement #cyberegulation
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