The U.S. Securities & Exchange Commission has issued a stern warning to every financial firm and board of directors under its watchful eye: get your cybersecurity programs in shape or face the consequences.

And it’s doubtful the SEC’s admonition is limited to the financial sector.

In a cease and desist order against Voya Financial Advisors, an Iowa-based investment adviser, the SEC used for the first time its “Identity Theft Red Flags Rule” to censure the firm for allowing hackers to access social security numbers, account balances and even details of client investment accounts. The SEC adopted the red flags rule five years ago but until now, has not enforced the rule, nor has it punished firms for ignoring it.

The SEC’s Identity Theft Red Flags Rule – called “Regulation S-ID” – requires designated financial firms to develop and implement a written identity theft prevention program “designed to detect, prevent, and mitigate identity theft” for investment accounts. The rule also requires board oversight of the identity theft program.

During a six-day period in 2016, the SEC charged, cybercriminals called Voya’s helpline impersonating the firm’s independent investment representatives – who make up the largest segment of its workforce. Even though some of the telephone numbers used by the hackers had been flagged in Voya’s system for possible fraud, the callers were able to convince Voya’s helpline to reset their passwords and provide new passwords over the phone.

The intruders used the new passwords to gain access to customer information and to create new online customer profiles and identities, according to the agency.

The hackers were also able to change customer phone numbers and addresses, which meant account statements and confirmations would be re-routed to the hackers, without as much as triggering a fraud alert. In several instances, the SEC said, hackers used “@yopmail.com,” a disposable email service that allows users create an email address, to review incoming emails and then destroy everything.

In all, the SEC charged, 5,600 client accounts were compromised.

Voya had an identity theft program in place for nearly a decade but it has languished in recent years. The program fell far below the requirements of the rule. It also was not approved by the firm’s board or senior leaders, as is required and was ignored by Voya’s security team.

“VFA’s [Voya Financial Advisors] board of directors or a designated member of VFA’s management did not administer and oversee the Identity Theft Prevention Program, as required by the Identity Theft Red Flags Rule,” charged the SEC. The agency deemed Voya’s violation of the Red Flags Rule to be “willful.”

The rule – originally part of the Dodd-Frank regulatory overhaul – calls for investment firms to maintain an up-to-date identity theft prevention program that provides “red flags” or other warning signs when hackers might be trying to steal customer information or customer identities. The rule also requires that a firm’s board or senior leadership “administer and oversee” the program.

The SEC also charged Voya with violating its Safeguards Rule, which requires investment advisers and broker dealers to adopt written policies and procedures that address administrative, technical and physical safeguards to protect customer information. The agency said that Voya failed to reasonably design password policies, contractor access controls and security and customer account profile management procedures.

Voya neither admitted nor denied the SEC’s charges.

In the settlement, Voya agreed to pay a $1 million penalty and to make a series of improvements to its data security environment including the retention of an independent consultant to review its policies and procedures for compliance with both the Identity Theft Red Flags Rule and Safeguards Rule.

The New York Times reports that the SEC’s first-ever use of its red flags rule “should set off alarm bells for every financial firm and board of directors under the agency’s watch. Most companies are probably not in compliance with the rule and, given the agency’s increased focus on cybersecurity, they should move quickly to address any issues.”

Over the past few years, the SEC has made cybersecurity a priority. Earlier this year, the agency updated its guidance to public companies, telling them to beef up cybersecurity risk factors and data breach disclosures. And in April, the SEC pursued its first-ever cybersecurity enforcement action against Yahoo! after the company failed to disclose for more than two years that hackers had made off with the personal information of more than 500 million users. Altaba, the company that has since purchased Yahoo, was fined $35 million for the tardy disclosure.

The Voya settlement shows the SEC is paying close attention not only to an organization’s data security regulatory compliance measures including formal written data security policies and procedures – and whether they are kept current and work in practice – but the need to address cyber risk at the board and c-suite level when required. With the SEC’s regulatory expectations so clear, the price of ignoring this message will likely be steep.