Company says SEC wrong about stock data exposure (Reuters)

(Reuters) ? A company hired by the U.S. Securities and Exchange Commission to operate the agency's stocks ethics program is denying allegations that it breached a provision in its contract by failing to disclose its use of a subcontractor.

The statement by Financial Tracking Technologies, issued early Saturday morning, came after Reuters reported that the Securities and Exchange Commission was offering free credit monitoring to employees over concern that FTT had shared staffers' personal brokerage account information without the SEC's permission.

FTT was hired by the SEC in 2009 to operate the ethics program, which tracks employee trades to help prevent potential conflicts of interest, such as insider-trading.

The SEC sent a letter to employees on October 7 saying FTT had violated a term in its contract by giving the stock account data to a subcontractor and consultant without telling the SEC.

Because those firms had not been vetted, the SEC said employees' data may have been compromised. While no data was misused, the SEC urged employees to be cautious and consider placing a fraud alert on their accounts.

But in its statement, FTT Managing Principal Tony Turner denied the SEC's assertions, saying the subcontractor's access to the data "was authorized and was subject to our supervision and monitoring at all times."

He said his company's use of a third-party vendor was also disclosed to the SEC in various documents, including the formal bound proposal and subsequent business continuity plans.

"No data left our system and, as the SEC indicated, there is no evidence of any misuse of any data," Turner added.

Turner also expressed disappointment that a former FTT consultant had gone to the SEC with concerns about the data security, saying it is "unfortunate" this person "created an incident where none ever existed."

SEC spokesman John Nester declined to comment on FTT's statement.

(Reporting by Sarah N. Lynch in Washington D.C.; Editing by Tim Dobbyn)

Source: http://us.rd.yahoo.com/dailynews/rss/stocks/*http%3A//news.yahoo.com/s/nm/20111017/bs_nm/us_sec_stockdata

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