AP Summary

SEC Settles Recordkeeping Charges with ICBC Financial Services in Connection with Cybersecurity Incident

Dec. 2, 2024

ADMINISTRATIVE PROCEEDING
File No. 3-22335

December 2, 2024 - The Securities and Exchange Commission today filed settled charges against Industrial and Commercial Bank of China Financial Services LLC (ICBC Financial Services) for deficient books and records. The SEC decided not to impose civil penalties against ICBC Financial Services because the company promptly undertook remedial measures and cooperated with the staff's examination and investigation.

According to the SEC's order, in November 2023, ICBC Financial Services was the victim of a ransomware attack. The SEC's order finds that the attack led to a disruption in the firm's access to, and ability to update, its books and records information in its various systems. The SEC's order further finds that between November 8, 2023 and March 1, 2024, ICBC Financial Services failed to keep current its books and records, and to give or send written notifications for securities-related activity to its customers as required by the securities laws. According to the SEC's order, the firm subsequently investigated the circumstances leading to the cybersecurity incident and determined that the root causes included its inadequate preparations for a potential cybersecurity incident.

The SEC's order finds that ICBC Financial Services willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-3(a) thereunder, as well as Rule 10b-10(a) of the Exchange Act. Without admitting or denying the SEC's findings, ICBC Financial Services agreed to a cease-and-desist order and a censure. As described in the order, the SEC decided not to impose civil penalties in light of the meaningful cooperation and extensive remedial measures undertaken by ICBC Financial Services.

The SEC's investigation was conducted by Karolina Klyuchnikova and Lindsay S. Moilanen of the New York Regional Office and was supervised by Tejal D. Shah.

Last Reviewed or Updated: Dec. 2, 2024