Former SEC Employee Admits to Hacking, Fabricating ETF Approvals

Eric Council Jr., a former employee of the U.S. Securities and Exchange Commission (SEC), has pleaded guilty to hacking into the agency's systems and fabricating approvals for exchange-traded funds (ETFs). The guilty plea comes after an investigation into the unauthorized access and manipulation of the SEC's Electronic Document Gathering, Analysis, and Retrieval (EDGAR) system.

Council Jr., who worked as a software engineer at the SEC, admitted to exploiting a vulnerability in the EDGAR system to gain unauthorized access to non-public information. He then used this information to create fake approvals for ETFs, which he submitted to the SEC for consideration. The false approvals were designed to give the appearance that the ETFs had been approved by the agency, potentially misleading investors and the public.

The SEC discovered the breach in 2020 and launched an investigation, which led to the identification and arrest of Council Jr. in 2021. The investigation revealed that Council Jr. had accessed the EDGAR system without authorization on multiple occasions between 2016 and 2020, causing significant damage to the agency's security and reputation.

The guilty plea marks a significant development in the case, as it brings Council Jr. one step closer to facing the consequences of his actions. The SEC has not yet announced the specific charges or penalties that Council Jr. will face, but the potential penalties for such a serious breach could include significant fines and imprisonment.

The incident highlights the importance of robust cybersecurity measures and the need for constant vigilance in protecting sensitive information. As the SEC and other regulatory bodies continue to grapple with the challenges posed by cyber threats, they must remain committed to investing in and strengthening their security measures to prevent similar incidents in the future.