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eSentire and the SEC: OCIE, EERT 2020 and Beyond

BY Eldon Sprickerhoff

September 3, 2020 | 5 MINS READ

Incident Response

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In late July 2020, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) announced the creation of the Event and Emerging Risk Examination Team (EERT). The EERT will proactively engage with financial firms about emerging events, and will quickly mobilize to provide specific expertise and resources to the SEC’s regional offices when critical matters arise.

The EERT will assist OCIE staff through examinations and other firm engagement and monitoring activities, ensuring that firms are better prepared to address exigent threats, incidents, and emerging risks. These events could include those that have a systemic impact or place investor assets at risk, such as exchange outages, liquidity events and cybersecurity or operational resiliency concerns.

The announcement of this new group neatly coincides with a cybersecurity risk alert released on July 10, 2020 around updated concerns regarding ransomware to financial industry participants, including broker-dealers, investment advisers, investment companies, and registrant service providers. They have placed specific focus on:

1) Incident response and resiliency policies, procedures, and plans

2) Operational resiliency

3) Awareness and training programs

4) Vulnerability scanning and patch management

5) Access management

6) Perimeter security

Since early 2014 when SEC-OCIE released their first publicly accessible request for information, eSentire has tracked the compliance needs of registered investment advisors, hundreds of which are our customers.

How can eSentire’s multifaceted Managed Detection and Response (MDR) service offerings coupled with our Managed Risk Programs (MRP) specifically help address the concerns raised in the SEC-OCIE’s most recent risk alert questions?

This chart quickly shows how eSentire’s offerings match SEC-OCIE concerns:












Red Team


Incident response

Operational resiliency

Awareness & training

Vulnerability scanning

Access management

Perimeter security

Let’s go through this point by point.

Incident Response and Resiliency Policies, Procedures and Plans

eSentire was founded on the principle of hunting for attacks that evaded existing cybersecurity implementations. Before the term Managed Detection and Response was created, some descriptors included “Embedded Incident Response” or “Micro-Incident Response.” The thought process was as such: it is better to have caught an incident while it was small, before it escalated to something much larger. A remote team, watching for unusual indicators, given the tools to escalate and shoot down this questionable incident could be more effective than boots on the ground deployed at best hours afterwards. For each of the almost nineteen years of eSentire’s existence, the security operations team has analyzed, mitigated and resolved hundreds of thousands of incidents.

In addition to consulting efforts assisting customers, eSentire has created a Pragmatic Security Event Management Framework for incident response policies and procedures. The framework contains a dozen possible incident scenarios to help investment management firms prepare for the eventual incident by formalizing the process and team members in documentation. Similarly, eSentire’s Managed Risk Program helps assess a firm’s information security maturity and stance, and through the vCISO offering can evolve and improve it.

Operational Resiliency

Information security often broadly defines itself through the CIA triad: Confidentiality, Integrity, and Availability. Operational Resiliency depends on the consistent application of the facets of CIA. As the table above shows, both of eSentire’s MDR and MRP offerings provide broad coverage to enhance firms’ operational resiliency from technical, compliance and administrative perspectives. These offerings help to support all systems and processes in the continued operation of critical operations therein.

Awareness and training programs

I’ve called security awareness and training programs the “ongoing inoculation of skepticism” needed to stay secure from a personal and business perspective. eSentire’s Managed Risk Program offers tailored Phishing and Security Awareness programs to keep employees up-to-date with the evolving threat landscape, test and track their progress, and quantify risk down to the individual level.

Vulnerability scanning and patch management

Vulnerability scanning (at its core, the ability to look for gaps in current implementations) is a critical part of maintaining an excellent security stance. I have seen many firms with strong patch management systems discover through vulnerability scanning, gaps within the actual implementation of said patches. eSentire’s Managed Vulnerability Service helps to identify where patching methods fall short. Especially in the current COVID-enforced work-from-home situation where patch management might fall to the wayside, it is more critical than ever to identify the gaps in vulnerability management. This must include updated firmware, operating system software and applications, with specific focus given to commercial-grade antivirus, antimalware and other endpoint software.

Access management

Access to your environment is the head of the snake; if you can control the head, you can control the rest of the body. All security hinges on the control of access therein. Several offerings within eSentire’s MDR service help to get a grip on access concerns; the primary tool being esLOG, which performs analysis regarding unusual logins. In addition, esINSIDER flags unusual access internally within the environment itself, using large data sets of network behavior, searching for anomalous behavior. While multi-factor authentication (MFA) is a critical and necessary piece of the greater access management model, there are many ways that it can be bypassed. eSentire’s MDR service can help identify when a bypass may have occurred, and allow for deeper investigation as needed.

Perimeter security

OCIE recognizes that registrants should be able to control, monitor, and inspect all incoming and outgoing network traffic to prevent unauthorized methodologies. Historically, perimeter security referred to network-based systems (including firewalls, virtual private network devices, and intrusion detection/prevention systems): systems through which all network traffic that traversed, and email security. With the move to cloud offerings (SaaS, IaaS), coupled with work-from-home, the perimeter has broadly expanded to practically everywhere. This hybrid, always-on infrastructure makes broad coverage and insight into security more critical than ever before. It doesn’t mean you can wholly abandon the classic network insight any more than you’d abandon your firewall; it means you need to broaden your scope and adjust your focus.

From as early as April 2014, eSentire’s managed information security services and consulting arms have demonstrably provided their value regarding ongoing and evolving SEC-OCIE and EERT guidance and risk alerts. We will remain on the forefront, vigorously and proactively defending our investment management customers from attackers and helping to ensure compliance with demonstrable rigor.

Eldon Sprickerhoff
Eldon Sprickerhoff Founder and Advisor

Eldon Sprickerhoff is the original pioneer and inventor of what is now referred to as Managed Detection and Response (MDR). In founding eSentire, he responded to the incipient yet rapidly growing demand for a more proactive approach to preventing and investigating information security breaches. Now with over 20 years of tactical experience, Eldon is acknowledged as a subject matter expert in information security analysis. Eldon holds a Bachelor of Mathematics, Computer Science degree from the University of Waterloo.

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