Expect Patriotic Hacking From Eastern EU: Kellerman

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May 2 (Bloomberg) -- Tom Kellerman, managing director at Alvarez and Marshal, discusses the cyber threats to financial stability with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

What is the sec's biggest fear?

What is going on?

The lack of reporting in the marketplace.

More firms are being breached.

Significant resources in material risk.

Financial firms?

Broker's houses, major publicly traded companies.

How is it we do not hear about that?

Off and they are not aware they have been breached until they are notified that their accounts are being sold and bartered in the shadow economy.

It is terrifying because you think of your financial data being out there.

It really means we are all being vulnerable in a certain way.

Who is responsible, would you say, primarily for a lot of these attacks?

Are they internal?

Are they coming from abroad?

They are coming -- it today -- it takes six months to notice that you have been breached.

Six months?

It takes that long to notice the data is missing?

They are conducting frontline examinations based on what is happening in the boardroom on compromise financial systems.

What should the sec be doing?

I think the sec needs to modernize management.

There must be mandatory reporting for cyber breached organizations.

They should have a strategy, and incidents response plan -- they do not have a cyber strategy?

The sec may have internally for the sec, but most firms do not have their own cyber strategies that are necessary in this very hostile environment.

Ok, so broker houses, big banks -- most large financial institutions do have plans i am place.

But they are being hunted by the biggest hackers and the world, most in eastern europe.

-- most large financial institutions do have plans in place.

Let's talk about eastern europe.

We have been talking about ukraine.

What is the chance we are going to pose sanctions, given that a lot of these tax are happening out of eastern europe, does that mean we will be more vulnerable?

Very much so.

I think will -- we will see more patriotic hacking.

Patriotic hacking?

They are being called upon to crush the u.s. and their allies for leveraging these economic sanctions.

You can see harbingers of these.

That is what you are worried could happen?

I think the u.s. does not have the sole power to punish someone through economic sanctions.

Ok.

bottom line?

We need to be prepared.

We need to be prepared and cyber security should be viewed as an operational functionality tom and not an expense, but a functionality of doing business.

Before you go, we saw that target just hired someone who you may have worked with.

Someone from homeland security.

Do you think that will help target in terms of its preparedness?

Target has a monumental task in front of it.

I hope with its leadership they can move forward in a proactive way.

They need to get rid of what is in her house and that is probably multiple backdoors that need to be eradicated.

This text has been automatically generated. It may not be 100% accurate.

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