Fintech firm EquiLend announced that it has successfully restored several key services, including trading and post-trading solutions, more than a week after falling victim to unauthorized access to its systems. The incident had forced EquiLend, a pivotal player in securities lending on Wall Street, to take certain portions of its systems offline.
EquiLend’s Chief Information Officer, Ken Degiglio, and Chief Technology Officer, Kumar Arvind, have been working diligently to address the breach and restore normalcy to the company’s operations. EquiLend does not reveal the name of its cyber security partner which is responsible for protecting its IT network from attacks.
The affected platform, Next Generation Trading, manages an impressive $2.4 trillion in transactions monthly, with a diverse client base comprising nearly 200 asset owners, agency lending banks, broker-dealers, and hedge funds, as per the company’s website. Notably, EquiLend boasts partial ownership by major financial institutions, including Goldman Sachs, BlackRock, J.P. Morgan, and Bank of America Merrill Lynch.
Founded in 2001 by a consortium of global banks and broker-dealers, EquiLend focuses on developing technology to enhance efficiencies in the securities finance market. Over the years, its suite of financial technology solutions has supported various aspects of securities finance market participants’ businesses, such as electronic trading, order management, post-trade automation, data and analytics, and regulatory technology solutions.
Last week, the cybersecurity incident led market participants to resort to manual processing, causing limited impact, according to a spokesperson at the Financial Services Information Sharing and Analysis Center (FS-ISAC) who spoke to Reuters.
Additionally, clients faced potential risks of missing crucial regulatory reporting obligations, warned Josh Galper, managing principal at capital markets consultancy Finadium. Galper emphasized the impact on risk and capital ratios, as well as the ability to manage and report to regulators in the absence of data from EquiLend.
However, with services now being restored, Galper expressed confidence that the data would be sorted out over time, with reports eventually being filed, albeit potentially with delays.
Recently, private equity firm Welsh, Carson, Anderson & Stowe (WCAS) has agreed to acquire a majority stake in EquiLend. The acquisition is anticipated to conclude in Q2 2024. WCAS, a prominent U.S. private equity firm focused on technology and healthcare, has further committed a substantial $200 million investment to support EquiLend’s organic growth initiatives and potential acquisitions.