Overnight Finance: SEC says hackers may have profited from stolen info | Senators to grill Equifax, Wells Fargo chiefs | Trump hits North Korea with new sanctions

SEC says hackers may have profited from stolen insider information: The Securities and Exchange Commission (SEC) revealed Wednesday that hackers breached its system for public-company filings and may have profited from stolen insider information.

SEC Chairman Jay Clayton said in a statement that hackers exploited a software vulnerability in the regulator’s EDGAR filing system. That breach was discovered in 2016, he said, but the SEC did not learn about the possibility of unlawful trading until 2017.

The SEC says the software flaw was quickly patched, and that no sensitive personal information, such as credit card or Social Security numbers, was exposed in the breach.

{mosads}

“Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic,” said Clayton in a statement. “We must be vigilant. We also must recognize–in both the public and private sectors, including the SEC–that there will be intrusions, and that a key component of cyber risk management is resilience and recovery.” http://bit.ly/2yuBCwK.

 

Senate Dem calls on businesses, feds to ‘step up’ on cybersecurity: A top Senate Democrat on Thursday said the private and public sector needs to boost its cybersecurity after the Securities and Exchange Commission (SEC) revealed that hackers might have profited off of insider information stolen from the agency’s disclosure filing system.

Sen. Mark Warner (D-Va.), a member of the Senate Banking Committee, said the SEC breach “shows that government and businesses need to step up their efforts to protect our most sensitive personal and commercial information.”

Warner said he’d press SEC Chairman Jay Clayton on the agency’s rules dictating when companies must report data breaches when he appears before the banking panel next week.

“Information has become one of our country’s most valuable resources, and control of that information comes with significant responsibility,” Warner said. “The SEC should not retreat from its important market oversight role in order to limit its exposure to sensitive information.” http://bit.ly/2feu2y8.

 

Senate Banking panel to grill Equifax, Wells Fargo chiefs next month: The Senate Banking Committee is set to host the CEOs of Equifax and Wells Fargo next month as both companies face the fallout of massive financial scandals that have dominated headlines and tarnished their names.

Wells Fargo CEO Timothy Sloan will testify before the banking panel on Oct. 3, while Equifax CEO Richard Smith will appear on Oct. 4. The executives are expected to face hostile questions from both parties after a series of missteps that have triggered federal investigations.

Sloan will likely face questions about the up to 3.5 million Wells Fargo accounts opened without customers’ consent, as well as the rampant sale of unwanted auto and life insurance policies through misleading tactics. His predecessor, John Stumpf, appeared before the Banking Committee in 2016 before retiring soon after.

The Federal Reserve, Justice Department and several state agencies are investigating Wells Fargo, and the Consumer Financial Protection Bureau fined the bank more than $180 million in 2016, its biggest penalty yet issued: http://bit.ly/2ytiPCa.

 

Trump announces new sanctions on North Korea: President Trump on Thursday signed an executive order imposing new sanctions on North Korea as the U.S. and its allies sought to ramp up pressure on Kim Jong Un to abandon his nuclear ambitions.

Speaking at the United Nations before a working lunch with Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in, two key allies in the region, Trump said the order would significantly expand the U.S. ability to crack down on individuals and companies that do business with North Korea.

The president said he had empowered the Treasury Department to “target any individual or entity that conducts trade in goods, services or technology” with the country. The order also includes measures designed to “disrupt critical North Korean shipping and trade networks.”

Flanked at a table by Treasury Secretary Steven Mnuchin, Vice President Pence, Secretary of State Rex Tillerson and U.S. Ambassador to the U.N. Nikki Haley, Trump expressed an urgency to curb North Korea’s nuclear and ballistics programs. The Hill’s Jonathan Easley reports: http://bit.ly/2ytZhh6.

 

Pence to push tax reform in Indiana with Democrat Donnelly in tow: Vice President Pence will visit his home state of Indiana on Friday to push tax reform with Democratic Senator Joe Donnelly in tow, according to the White House.

Donnelly, who is up for reelection in 2018, is considered a vulnerable Democrat in a state that Donald Trump won by 19 points, and where Pence served as governor. In August, the Cook Political Report moved the race from “lean Democrat” to its “tossup” category.

The trip is the latest in the Trump administration’s efforts to court vulnerable Democrats to back its tax efforts.

Donnelly will be the lone Democrat in the delegation, which will include Republican Gov. Eric Holcomb and Indiana Reps. Susan Brooks, Luke Messer and Todd Rokita, who is running in the primary to challenge Donnelly. http://bit.ly/2yveI8K.

 

Happy Thursday and welcome back to Overnight Finance. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@digital-staging.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

 

Trump calls South Korean trade deal ‘so bad’ for the US: President Trump on Thursday bashed the five-year-old trade agreement between the United States and South Korea while sitting next to that nation’s president, Moon Jae-in.

Trump, who earlier this month threatened to withdraw from the U.S.-Korea Free Trade Agreement, said that, besides discussing North Korea’s growing nuclear threat, the two leaders would address nagging trade issues.

“So because of the fact that our trade deal is so bad for the United States and so good for South Korea, I said we’ll focus on the military, but actually we’re going to try to straighten it out and make it fair for everybody,” Trump said while sitting next to Moon ahead of their meeting. 

“But our real focus will be on the military and our relationship with South Korea, which is excellent,” he said: http://bit.ly/2ytc6YZ.

 

Dems see new leverage in end-of-year spending fight with Trump: Democrats believe they have an extra bit of leverage in the government-funding fight this winter: the GOP’s fear of cuts to the Pentagon.

If Congress doesn’t agree to a new spending deal, strict limits on defense and nondefense spending will be reintroduced under the 2011 Budget Control Act.

Congress can’t use its normal stopgap funding measures to avoid the caps, either, meaning that lawmakers can’t pass a continuing resolution that simply keeps the existing flow going without running into the stricter budgetary ceilings.

Democrats and Republicans alike oppose the ceilings, but there’s an added pain for the GOP given its ownership of the White House and Congress: http://bit.ly/2ytLR4M.

 

EU outlines push for higher taxes on tech companies: The European Union is preparing to propose stiffer taxes on digital companies if the rest of the developed world doesn’t overhaul the international tax system.

The European Commission, the EU’s executive wing, released a report on Thursday outlining its agenda to create a more equitable tax system. European officials are frustrated that Silicon Valley companies that do business on the continent get away with paying little in taxes because they often lack a physical presence there.

“The goal of this Commission has always been to ensure that companies pay their fair share of tax where they generate profits,” Pierre Moscovici, the EU’s tax chief, said in a statement. “Digital firms make vast profits from their millions of users, even if they do not have a physical presence in the EU.” http://bit.ly/2yu0Uez.

 

Sanders blasts GOP push to increase military spending: Sen. Bernie Sanders (I-Vt.) blasted Republican efforts to boost military spending Thursday, linking defense spending to proposed cuts in health care.

“Foreign policy is about U.S. government budget priorities,” Sanders said in a foreign policy speech at Westminster College in Fulton, Mo.

“At the exact same time as the president and many of my Republican colleagues want to substantially increase military spending, they want to throw 32 million Americans off of the health insurance they currently have because, supposedly, they are worried about the budget deficit,” he continued, referring to GOP efforts to repeal ObamaCare.

The Senate approved a $700 billion defense authorization bill this week, following the House’s approval of a $621 billion defense appropriation. The House bill would be a $70 billion increase over current defense spending levels. http://bit.ly/2ytlUlR.

 

GOP rep on paying for flood loss: ‘At some point, God is telling you to move’ Rep. Jeb Hensarling (R-Texas) said on Thursday that it’s unreasonable for taxpayers to repeatedly pay for homes that have flooded, suggesting that homeowners move out of at-risk houses. 

“We have these repetitive loss properties. So, for example, we have one property outside of Baton Rouge that has a modest home worth about $60,000 that’s flooded over 40 times. The taxpayers have paid almost half a million dollars for it,” Hensarling said on CNBC’s “Squawk Box.” 

“At some point, God is telling you to move,” he added.

“If all we do is force federal taxpayers to build the same home in the same fashion in the same location and expect a different result, we all know that is the classic definition of insanity,” he continued. 

Hensarling’s comments come as his home state of Texas recovers from catastrophic flooding that occurred last month in the wake of Hurricane Harvey. http://bit.ly/2ff3LQ8.

 

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