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How to close the race-based chasm in U.S. retirement wealth

CHICAGO (Reuters) – The gap in U.S. retirement wealth between white and minority families has widened to the point where it really is not a gap anymore. It is a canyon.

In 2016, white families had six times more money saved for retirement on average than black or Latino families, according to new data from the Federal Reserve’s Survey of Consumer Finances. As recently as 2007, the gap was fourfold for black families and fivefold for Latino households, according to a new analysis of the Fed data by the Urban Institute. (urbn.is/1Vj06A3).

Research shows that low-income families can – and do – save. Instead, the widening chasm results from a range of economic factors and upside-down tax policy. Lifetime income inequality certainly is one driver, but the problem is much broader than that, said Signe-Mary McKernan, co-director of the institute’s opportunity and ownership initiative.

“The cards are stacked against lower-income Americans,” she said. “We’re a country built on the premise of economic opportunity but entire groups are not getting the same chances to move up.”

For starters, minority workers are far less likely than whites to hold jobs that offer tax-advantaged retirement saving programs like 401(k) plans. That means these workers are not enjoying the benefits of plan features such as employer matches or automated contributions. Even workers who are offered these accounts do not benefit as much, since the tax incentives associated with 401(k) and Individual Retirement Accounts are structured as deductions, and flow predominantly to taxpayers in higher brackets.

Lower rates of home ownership among minority households also contribute to the retirement gap, the researchers found. Last year, 68 percent of white households were homeowners, compared with 46 percent of Latino households and 42 percent of black households, the Urban Institute reports. That means fewer minority households can tap in to home equity to meet retirement needs.

”When you think about home ownership, part of the story is appreciation of home values, but families of color have faced structural barriers in achieving this goal,” said Kilolo Kijakazi, an Urban Institute fellow also working on the wealth gap research.

Well-qualified home buyers of color face substantial barriers such as being shown fewer homes, the institute’s research shows. And price appreciation for homes in neighborhoods of color is lower than in white neighborhoods with comparable income levels. Lower home ownership rates and less home equity mean fewer families of color can tap in to home equity to meet retirement needs.

Federal tax policy is upside-down here, too, with current tax subsidies flowing to the most affluent households, who are more likely to itemize their filings and tend to be in higher tax brackets. The capital gains exclusion on housing also benefits higher-income taxpayers, who tend to own more expensive homes.


Targeted federal policies could go far to close the gap – starting with the tax code. On home ownership, for example, we could establish a first-time homebuyer tax credit and a refundable credit on property taxes. This could be funded by limiting the mortgage interest deduction for the most affluent households. For example, the Bowles-Simpson fiscal commission back in 2010 proposed capping the deductibility of mortgage interest at $500,000.

Improving the federal Saver’s Credit also could be a big help. The credit provides a second layer of tax incentives for lower-income households beyond the benefit of tax deferral that everyone receives for contributing to a 401(k) or IRA. Taxpayers with yearly incomes of less than $31,000 (single filers) and $62,000 (joint filers) this year can claim a credit of up to $1,000 for contributions to a qualified retirement plan or individual retirement account (IRA) – but only if they have a tax liability.

Near 10 percent of tax filers could claim the credit, but only about 5 percent do so, according to the National Institute on Retirement Security. Restructuring the credit into a match would have the biggest impact. That could be done by making the credit refundable – in other words, available no matter what your tax liability (reut.rs/2hACrwq).

Federal policy under the Trump administration is heading in exactly the opposite direction, especially where retirement saving and tax policy are concerned. The administration is phasing out the U.S. Department of the Treasury’s myRA program, a low-cost, simple entry-level retirement saving plan targeting workers who are not offered a plan by employers. And Congress has pulled back two Obama-era rules aimed at helping states launch their own low-cost saving programs.

Meanwhile, the administration’s tax plan would further fuel the inequality trends, not reverse them. Tax cuts would flow mainly to businesses and high-income households. If in place next year, 50 percent of the cuts would flow to households with the top 1 percent of income ($730,000 or more), according to the Tax Policy Center, while middle-income households (earning $50,000-$90,000) would receive about 8 percent. Low-income households would receive even less. And the plan is silent on the issue of mortgage interest deductions and credits for first-time homebuyers.

Instead, we need smart policies that help low-income households get ahead. Let’s start narrowing the retirement chasm – now.

Editing by Matthew Lewis


Published at Thu, 12 Oct 2017 15:00:15 +0000

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New York-area hedge fund manager charged with Ponzi fraud


New York-area hedge fund manager charged with Ponzi fraud

NEW YORK (Reuters) – A suburban New York hedge fund manager accused of losing or spending all but about $27,000 of the $21.8 million he told investors he had was criminally charged on Thursday with running a Ponzi scheme.

Prosecutors said Michael Scronic, who once worked at Morgan Stanley (MS.N) and has degrees from Stanford University and the University of Chicago, stole more than $19 million from 45 investors he had lured to his Scronic Macro Fund by lying about his track record.

Scronic, 46, of Pound Ridge, New York, allegedly lost money in 28 of 29 calendar quarters since April 2010, even as he reported largely positive returns on bogus account statements.

Prosecutors said he also spent $2.9 million on himself over 5-1/2 years, including $180,000 annually on credit cards, fees for beach and country club memberships, and mortgage payments for a vacation home near Stratton Mountain in Vermont.

Scronic was criminally charged with one count each of securities fraud and wire fraud.

He was released on $500,000 bond after a brief appearance in the federal court in White Plains, New York, and is forbidden from trading other people’s money or raising new funds.

The U.S. Securities and Exchange Commission filed related civil charges.

Robert Anello, a lawyer for Scronic, declined to comment.

The defendant had worked for Morgan Stanley from 1998 to 2005, including on an equities trading desk, court papers show. Morgan Stanley was not accused of wrongdoing.

Authorities said Scronic used some new money to repay earlier investors, but as cash became tight this summer refused to honor some investors’ redemption requests.

According to court papers, Scronic had emailed one of those investors in November 2015 that “what’s cool about my fund is that i‘m only in publicly traded options and cash so any redemptions are met within 2 business days so if you do need to withdraw for your business needs it will be quick and painless.”

Authorities said it proved otherwise.

They said Scronic blamed a vacation, a relative’s medical condition, email issues, and a new quarterly redemption policy for refusing the investor’s Aug. 8 redemption request.

As of Monday, that investor was still waiting for his money, court papers showed.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown, Lisa Shumaker and David Gregorio


Published at Thu, 05 Oct 2017 21:45:59 +0000

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Quest: Are Theresa May’s days in charge numbered?


Brexit trouble for Theresa May
Brexit trouble for Theresa May

Quest: Are Theresa May’s days in charge numbered?


Quest’s Profitable Moment

I wonder if we will look back on this week as the turning point when it became obvious Theresa May’s prime ministership is over. Her keynote speech to the Tory conference was by every conclusion a mishap-filled disaster.

Firstly, a prankster managed to get on the stage and handed her a P45 — the form used in the U.K. for dismissal. Then May got a coughing fit and had to be handed a throat lozenge by the chancellor. Finally, some of the letters on the screen behind her fell off while she was finishing up.

At the moment, the only reason to keep Theresa May is the alternatives are grim, if not worse. The foreign secretary, Boris Johnson, is a brilliant man suffused by his own ambition. Everyone else is either dull, dangerous or deluded. So, Mrs. May continues.

It would be a grave mistake for the European Union to engage in schadenfreude, rubbing their hands in glee at this confusion. Some clearly hope the British confusion will enable the EU to “get one over” on the U.K., punishing them for leaving and sending a warning to other upstarts. That would be disaster. A failed negotiation may hurt the Brits more than the rest, but in the long run everyone will suffer.

Theresa May’s days as prime minister are numbered. What comes after may be worse. The Brexit negotiations are stuck in phase one and time is running out. Politics as normal must not be the way forward on either side if we are to avert disaster of the worst kind.


Quick takes

Warren Buffett gets into truck stop biz on the same day he trolls Trump, GOP

More Uber drama: Former CEO gets slapped down. Japan’s SoftBank invests

Wells Fargo slammed by Elizabeth Warren, accused of lying to Congress

Shock over Equifax/IRS deal at hearing that Monopoly Man photobombed

Echoes of the dotcom bubble as China’s tech stocks party like it’s 1999

What’s next

Jobs, jobs, jobs:The U.S. Labor Department is set to release September jobs numbers on Friday. The unemployment rate is expected to reflect layoffs linked to Hurricanes Harvey and Irma, which hit hard in Texas and Florida.

Big banks share earnings:It’s a big week for investors who keep an eye on big banks. JPMorgan and Citigroup report earnings on October 12. PNC, Bank of America and Wells Fargo will follow suit the next day.


Published at Fri, 06 Oct 2017 04:10:24 +0000

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Column: Pre-tax retirement contributions at risk in tax reform


Column: Pre-tax retirement contributions at risk in tax reform

NEW YORK (Reuters) – If you like the income tax reduction you get for your 401(k) contribution then make sure to max out now, because you may not get the chance in the future.

Tax reform proposals of past years from both political parties have targeted the break people get for 401(k)s because it is a gigantic source of untaxed money – perhaps more than $580 billion over five years, according to a 2016 Joint Committee on Taxation estimate.

The Tax Policy Center suggests that Congress needs to find $2.4 trillion over 10 years to avoid increasing the deficit with the current tax reform proposal. So the temptation to end the 401(k) tax break could be intense. Currently, 401(k) contributions come from pre-tax earnings, and the government waits until you take the money out in retirement to tax it and the returns it has earned.

If Congress gets rid of this system, saving for retirement would be more like saving in a Roth IRA or Roth 401(k). With a Roth, you do not get any tax benefit when you contribute, but the money grows tax-free in the accounts. These accounts are also not subject to required minimum distributions, which retirees must take from 401(k)s beginning at age 70 1/2.

Roth rules can be a great benefit because people can count on every cent after retirement without worrying about Uncle Sam taxing it. Retirees also are not forced to spend their nest egg, so they can pass it along to heirs with fewer restrictions if they have money left over.

It is not clear, however, how the fine print would shake out, because there is no specific proposal on the table yet from Congress. Nevertheless, retirement saving advocates are bracing for a potential fight over preserving the 401(k) system’s tax breaks as negotiations over tax reform progress. They know Congress will start looking for sources of billions of dollars so it can cut taxes without adding to the nation’s budget deficits, notes Brigen Winters, an attorney with Groom Law Group and lobbyist for 401(k) advocates such as the Plan Sponsor Council of America.

Jack VanDerhei, research director for the Employee Benefit Research Institute, is already studying the potential impact, so he is ready at any time.

The big fear among experts like Winters and VanDerhei is that if people cannot contribute pre-tax money to their 401(k), they will cut back on saving and the nation’s looming retirement savings crisis will worsen. Americans already are saving so little that 52 percent of Americans are on track to struggle in retirement, according to the Center for Retirement Research at Boston College.

The way it works now takes some sting out of saving. For every $1,000 a person in the 25 percent tax bracket socks away, they pay $250 less in taxes, notes the H&R Block Tax Institute. If that money cannot go in pre-tax anymore, they would need to pay tax on all of their income and their take-home pay would diminish.

People do not like to see their take-home pay slip at all, says Aron Szapiro, director of Morningstar Public Policy Research. He calculated that a 30-year-old earning $50,000 and now saving 10 percent of pay, would cut savings to 7.5 percent to maintain the same level of take-home income while working. By retirement, the reduced savings level would lower total contributions to the nest egg to $230,400 from $307,200.  And that person would have only about $28,400 for living expenses compared with $30,800, Szapiro found.

Szapiro notes that young workers could ultimately benefit from the Roth treatment if their pay takes a big jump during their careers and they end up with a lot more income when they are retired than when they were young.

But he thinks most people miss an important point: The tax breaks people receive on 401(k) savings in the current system give them the financial leeway to save more early in life.

“If you take that away, people are going to say: why should I bother to contribute?’” says Szapiro. “It will be hard to get people to act, and that would be very bad for people in retirement.”

Editing by Steve Orlofsky


Published at Wed, 04 Oct 2017 21:20:30 +0000

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Tax Reform Should Bode Well for Charles Schwab


Tax Reform Should Bode Well for Charles Schwab

By Donna Fuscaldo | September 28, 2017 — 1:09 PM EDT

Charles Schwab Corp. (SCHW), the discount brokerage firm, has been bouncing along near its 52-week high so far this week, but that doesn’t mean it won’t go higher, particularly if President Donald Trump gets tax reform pushed through.

That’s according to Seeking Alpha, which laid out a bevy of reasons why investors may want to buy shares of Charles Schwab, one of the leaders in the online brokerage world. Even at $44.01, close to its 52-week high of $44.35, shares could start to gain more, particularly in the first quarter of next year.

Charles Schwab (SCHW) Upsides and Downsides

Take tax reform for starters. While all eyes have been on technology stocks that have a lot of cash overseas and are hoping for a reduced tax rate to bring it back to the U.S., Charles Schwab is the opposite, with little business outside the U.S. That means that if tax reform does get passed and the corporate tax rate is reduced, Schwab stands to benefit the most. On top of that, because it doesn’t have big exposure overseas, it won’t suffer as much as rivals from a weakening U.S. dollar. If the U.S. dollar stays weak next year it could increase interest in stocks like Schwab.

Use Investopedia’s broker reviews to find a broker to match your investing goals.

But it’s not just tax reform that could draw more interest to the San Francisco-based discount broker. On the sector front, with ongoing consolidation, Schwab could become an attractive takeover target for a big financial firm that is betting the financial markets will be huge during the next 10 years. While Schwab has been a player in the consolidation, it could become a target, which should send the stock higher.

Back in 2011, the company spent $1 billion to acquire OptionsXpress as way to get in on the options trading market. Rival E*Trade has also been on a buying spree in recent years, spending $725 million last July for OptionsHouse. If Charles Schwab doesn’t get bought out, its not a bad thing either for the stock. That’s because consolidation in a sector may not bode well for consumers, but it does mean less competition, which in turn could result in higher commissions for the likes of Schwab. That would be a welcome reversal from the years of declines.


Published at Thu, 28 Sep 2017 17:09:00 +0000

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Record inequality: The top 1% controls 38.6% of America’s wealth


Melinda Gates: Tax the rich to pay for services
Melinda Gates: Tax the rich to pay for services

America’s inequality problem is getting worse.

The richest 1% of families controlled a record-high 38.6% of the country’s wealth in 2016, according to a Federal Reserve report published on Wednesday.

That’s nearly twice as much as the bottom 90%, which has seen its slice of the pie continue to shrink.

The bottom 90% of families now hold just 22.8% of the wealth, down from about one-third in 1989 when the Fed started tracking this measure.

The numbers paint a stark picture of the inequality problems gripping the country and the ability of politicians, like President Donald Trump and Sen. Bernie Sanders, to attract voters by arguing that the system is “rigged” in favor of the rich.

Even the Fed acknowledged in the report that the distribution of wealth has “grown increasingly unequal in recent years.”

inequality wealth rich

Not only that, but the richest Americans are taking home an even bigger part of the nation’s overall earnings.

The top 1% of families brought in a record-high 23.8% of the overall income in 2016, the Fed said. That’s up from 20.3% in 2013 and about twice as high as the low point in 1992.

The bottom 90% of families now make less than half of the country’s income. That figure slipped to 49.7% last year, down from more than 60% in 1992.

The good news is that the middle class just enjoyed its biggest two-year raise in decades. Median household income ticked up by 3.2% last year following a 5.2% jump in 2015, according to the Census Bureau.

However, it’s not just a stagnant wages problem. The booming stock market may also be contributing to America’s inequality issues.

On the one hand, the Fed said that the value of stock portfolios rose “dramatically” over the past three years to an average of $344,500.

But millions of Americas can’t feel the stock market boom because they’re not invested or don’t have much money in the market.

Overall, 51.9% of families owned stocks in 2016, up from 48.8% in 2013. Stock ownership is much less popular among less affluent people though.

Barely one-third of families in the bottom 50% of earners own stocks, either directly or indirectly. The average stock portfolio among this group is worth about $52,000. That’s up significantly from 2010, but down from $55,300 in 2013.

By contrast, the Fed said 93.6% of the top income group owned stocks in 2016. Their average holdings stood at $1.4 million last year, up from $999,400 in 2013.

–CNNMoney’s Tami Luhby contributed to this report.


Published at Wed, 27 Sep 2017 20:05:00 +0000

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Political Tremors In Germany And Spain


Political Tremors In Germany And Spain


The datacenter hosting my VPS’ decided to hand me and a bunch of its client a crate of lemons when moving all its servers to a new location without previously advising its sub vendors. Well at least that is what mine is claiming and if you search for quickpacket on twitter you do indeed find a bunch of angry complaints on how the migration was handled. Now for me that means most of my VPS’ have been down since Sundays, leaving me hanging high and dry. Fortunately the Zero’s VPS is hosted somewhere else, so at least all you Zero subs will not be deprived of the signals today.

Now you probably know the old saying: if life hands you a bunch of lemons, make lemonade! While I unfortunately won’t be able to properly post my usual charts and campaign updates I believe the political crisis currently unfolding here here in Spain as well as in Germany may be worth summarizing as there appear to circulate a lot of myths and misinformation on both ends. And as a born German come American now living in Spain I do feel that I am somewhat qualified to offer my perspective on what is going on and where I believe things are heading here in Europe.



So let’s start with Germany, a subject pretty dear to my heart as I was born there and spent about 12 years of my life living in various parts of the country. Apologies for the picture but that is literally the friendliest snapshot of Chancellor Angela Merkel I was able to find. She’s not exactly a people person and the sweeping changes to Germany she spearheaded over her past three administrations do to some extent reflect the fact that she grew up under the East German regime in which she was a low level player in her early youth. She’s an extremely smart woman who holds a degree in quantum chemistry and was awarded prizes for her proficiency in Russian and Mathematics.

After the unification of Germany in 1989 the Democratic Awakening party Merkel had previously joined merged with West Germany’s CDU. Then Chancellor Helmut Kohl took her under his wings as sort of a protégé and the rest is history as the saying goes. After 12 years in power she is now embarking on her fourth term as German chancellor, but due to various controversial policies during her reign, mass immigration and a shift in energy policy being the most salient, a new nationalist party called the Alternative Für Deutschland (AfD) managed to more than double its percentage from under 5% to slightly over 12% during yesterday’s federal elections. Plus several of her allies and previous coalition partner SPD are now starting to distance themselves from Mrs. Merkel, not surprisingly so as their own election results yesterday took a major hit as well.

It is difficult to project forward from here as, just with the Federal Reserve, one should never under estimate the political skill of Angela Merkel. She has repeatedly run circles around her opponents and I am pretty confident that she will once again find a way to form a coalition and determine the course of Germany over the next four years to come. However that said, the easy days are over for Mrs. Merkel as she now will face not only the conservative AfD but also a strengthened FDP as well as both an embattled CDU and CSU (the Bavarian version of the CDU) which are now realizing that they are facing a fight for political relevancy.

Now I do have a pretty unique perspective on the situation as I left Germany in 1991, just after the reunification. The way I still remember Germany is what some people today may call antiquated and backward as much of the political shift toward the left happened after I was long gone. I suspect that previous chancellors like Helmut Kohl or Willy Brandt would be considered political extremists in this day and age but if one peruses the election program of the CDU or SPD from about 25  years ago then you’ll find that there’s a lot of overlap between them and what the AfD stands for today. You may disagree on that front but there simply is no way that Germany will be taken over by Neonazi right wing extremists. The German people have learned from history and they would never ever let this happen again.

I actually think that this may turn out to be a blessing in disguise, not so much for Mrs. Merkel and her CDU, but for Germany, as it once again gives the political center a chance to reassert itself. The last thing the liberals want to do is to continue ignoring or outright ostracizing a large percentage of its own population for political opinions that were considered mainstream just two or three decades ago. Because that is exactly what has happened over the past few years and once the center disappears completely what you may get is polarization on both fronts, which puts you on the fast track to civil war. And Germany in chaos always means Europe in chaos. I hope the Germans will continue to remember their lesson and use the coming four years as an opportunity to engage in mutual dialog and to prevent the rise of political extremism on both sides, the right and the left.



When it comes to Spain I am somewhat stunned by the overwhelming international support that Catalonia seems to be receiving in its struggle for independence. I wonder if California or Texas attempting to secede from the United States would receive a similar response. Be this as it may, this has been a train wreck in the making for a good part of the past decade now and the independista movement is just now receiving global recognition. Which always surprised me a little as a break off from Spain may send shockwaves through the entire European Union.

As I am a guest here I will not post my personal opinion on the subject as I believe this is something that Spain and Cataluña will have to sort out amongst each other. You will probably come across a lot of opinion pieces on the subject with both sides presenting very compelling arguments. All I would like to offer however is this: Although I do believe that secession would be terrible for both Spain and Cataluña as well as the rest of Europe, I also believe that all people have the right to self determination and to decide their own future. If a large part of a region wants to establish independence then it should be allowed to at least pursue that course.

It’s a bit like owning a dog and keeping it on a leash at all times. The more you try to exert control, the more eager it will be to run off at the first opportunity. The more space and love you give it the more it wants to stick around. Clearly a lot of political mistakes have been made and instead of demonizing Cataluña Madrid should take a good look at itself and ask why the Catalans are so eager to separate themselves from Spain in the first place. On the other side the Catalans of course need to carefully evaluate the pros and cons of secession, especially on a long term basis. A decision made as a result of regional pride and frustration about unfavorable policies coming out of Madrid may in the long term lead to unintended consequences.

But the die is cast now and increasing exchanges between pro-independence groups and Spanish loyalists will only accomplish exactly what I have warned about in my chapter on Germany – increasing polarization on both sides. Whether this in the end devolves into another regional civil war remains to be seen but I do believe that the potential for violent conflict exists as the Catalans are very proud and politically engaged people, and are not expected to simply stand by idly if they feel treated unfairly.

It’s important to remember that the Catalans always have considered themselves to be Catalans first and then perhaps Spaniards. Unlike down here in Valencia where Valenciano is used actively alongside with Spanish the Catalans insist on speaking mainly Catalan and will often refuse to engage you in Spanish. This shows a lot about their passion and the importance they put on their own regional language, culture, and of course their political future.

In closing, I wouldn’t worry too much about Germany at the current time and instead look at Spain for future signs of trouble. While Merkel will continue to dominate the international headlines it is Spain that is sitting on a proverbial powder keg that could go off at a moment’s notice.


Published at Mon, 25 Sep 2017 13:35:15 +0000

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Hack of Wall Street regulator rattles investors, lawmakers

Hack of Wall Street regulator rattles investors, lawmakers

WASHINGTON (Reuters) – Wall Street’s top regulator came under fire on Thursday over its cyber security and disclosure practices after admitting hackers had breached its database of corporate announcements in 2016 and may have used it for insider trading.

The breach involved the U.S. Securities and Exchange Commission’s EDGAR filing system, which houses market-moving information with millions of filings ranging from quarterly earnings to statements on acquisitions.

The SEC said on Wednesday evening it discovered in August that cyber criminals might have used a hack detected in 2016 to make illicit trades.

On Wednesday afternoon, SEC Chairman Jay Clayton gave members of Congress a “courtesy call” about the hack before it was announced publicly, said Representative Bill Huizenga, chairman of the U.S. House subcommittee that oversees the SEC, in a phone call.

“It’s hugely problematic and we’ve got to be serious about how we protect that information as a regulator,” Huizenga said.

The SEC disclosure came two weeks after credit-reporting company Equifax Inc (EFX.N) said a breach had exposed sensitive personal of data up to 143 million U.S. customers. This followed last year’s cyber attack on SWIFT, the global bank messaging system.

It is particularly embarrassing for the SEC and its new boss Clayton, who has made tackling cyber crime one of the top enforcement issues.

“The chairman obviously recognizes the irony of the SEC potentially serving as the unwitting tipper in an insider trading scheme,” said John Reed Stark, president of a cyber consulting firm and a former SEC staff member.

The SEC has said it was investigating the source of the hack but did not say exactly when it happened or what sort of non-public data was retrieved. The agency said the attackers had exploited a weakness in a part of the EDGAR system and it had “promptly” fixed it.

Most reports filed with the SEC “generally don’t contain super-sensitive information,” and any insider trading would have taken place soon after company filings were made but before they were released to the public, said Gary LaBranche, president of National Investor Relations Institute.

“People are shocked and disappointed,” LaBranche said. Members of the institute, who work with 1,600 publicly traded companies, will be examining their trading reports for any unusual activity that could be tied to disclosures, he said.

U.S. President Donald Trump’s administration has prioritized protection of federal agency networks after breaches during the Obama administration, including at the Office of Personnel Management, Internal Revenue Service and State Department.

Trump in May signed an executive order requiring agencies to use a specific framework to assess and manage cyber risk, and prepare a report within 90 days about how they implement it.

The SEC did not respond when asked about that review or whether it triggered the disclosure. But Clayton said in his Wednesday statement that he began reviewing the agency’s cyber risk in May.

SEC Commissioners did not learn of the breach until recently. In a statement, Republican SEC Commissioner Mike Piwowar, who for part of 2017 also served as acting chairman, said he was “recently informed for the first time that an intrusion occurred in 2016.”

Erica Elliott Richardson, a spokeswoman for the Commodity Futures Trading Commission (CFTC),the top U.S. derivatives regulator, said in an emailed statement the agency constantly reviewed and updated its cybersecurity protections to guard against the growing threat of a breach.

“Our agency has successfully thwarted hundreds of attempted breaches,” she added.

The Canadian Securities Administrators, an umbrella group representing Canada’s provincial securities regulators, said on Thursday it would conduct an additional security review.

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