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SEC Activity Slows Amid Shutdown; Charges Filed Against Hackers

The SEC’s operations have largely ceased amid the record-long federal government shutdown. Theagency expects to remain open a limited number of days but may soon halt all reviewing and processing of corporate filings, according to the Wall Street Journal. The public still has access to the SEC’s online Edgar database, but no new documents are being added to it.According to an SEC statement: “The Division of Investment Management continues to monitor the activity of registered funds, including the flows of funds to and from mutual funds and money market funds; trading activity in exchange-traded funds; funds that present particular risks to investors, such as mutual funds with a high level of illiquid securities or a high level of redemptions; and changes in industry exposure or market access that may affect registrants or other market participants.” Meanwhile, the SEC announced charges against nine defendants for participating in a previously disclosed scheme to hack into Edgar and extract nonpublic information to use for illegal trading. The SEC charged a Ukrainian hacker, six individual traders in California, Ukraine, and Russia, and two entities. The hacker and some of the traders were also involved in a similar scheme to hack into newswire services and trade on information that had not yet been released to the public. The SEC charged the hacker and other traders for that conduct in 2015. In total, the traders traded before at least 157 earnings releases from May to October 2016 and generated at least $4.1 million in illegal profits.

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