The Anthropic AI Incident and What Firms Must Address Immediately

Artificial intelligence is now a standard part of the cyber landscape, and the recent disclosures involving Anthropic and its Claude model have become a clear warning for financial advisory firms. The incident did not involve advisory firms directly, but it revealed a level of data exposure that all firms need to understand and address.

What Happened

Anthropic reported that a state-sponsored group in China used the Claude and Claude Code models to support targeted cyberattacks against multiple global companies. The attackers did not ask the model to perform a direct intrusion. Instead, they broke their actions into many small prompts that appeared to be routine security work. Each step appeared harmless, but when combined, they enabled tasks such as:

• Reconnaissance

• Identifying vulnerabilities

• Generating exploit code

• Testing large numbers of credentials

• Mapping exposed systems

• Documenting their activity

Only a limited number of attempts were successful, but the use of AI significantly increased speed, scale, and efficiency. This is notable, but it is not the part that should concern firms the most.

The Hidden Issue: Anthropic Could Reconstruct the Entire Attack

Anthropic disclosed that it was able to fully replay the attacker’s activity from inside its own platform. This means the provider could view, interpret, and reconstruct everything the users typed or uploaded, including sequential prompts, internal notes, code fragments, and any files attached during the workflow. The overlooked risk is that most firms focus on the danger of attackers using AI tools to increase the speed and sophistication of intrusions, but they often ignore the exposure created when sensitive information flows into the AI platform itself. Advisory firms sometimes assume that prompts are transient or private, yet model providers may store and review this content. That creates a secondary vulnerability because confidential client information, if entered into a public AI system, becomes accessible to a third party whose internal controls, retention practices, and monitoring standards are outside the adviser’s oversight.

Cybersecurity expert Brian Hahn of MTradecraft summarized the concern clearly:

“The attack itself is not the shocking part. What is surprising is that Anthropic showed it could reconstruct the entire operation from the inside. That means they can read, inspect, and analyze everything users type into their AI models and all the data they upload. For RIAs, that is the real threat. Your prompts, client information, and internal notes become unencrypted data flowing into a third party with full visibility and unproven security. That is a database that is highly attractive to attackers. The lesson is not that AI can hack. It is that firms must treat public AI tools as public data exposure points.”

This is the issue that changes the risk profile for advisers. Many firms have been thinking only about the risk of attackers misusing AI. The Anthropic incident shows that the greater danger may lie in the level of data access held by AI providers themselves.

Why This Matters for Advisory Firms

Advisory firms are required to protect client information, oversee third parties, and maintain written policies addressing the use of emerging technology. This incident highlights several lessons that should shape those controls:

• Public AI tools operate as data collection points rather than neutral software.

• Everything entered into these systems can be stored, reviewed, or analyzed by the provider.

• Nation-state actors and other well-resourced threat groups are actively attempting to compromise AI platforms directly.

• Firms need clear boundaries on how and where AI may be used.

• Third-party oversight must include questions about AI data retention, monitoring practices, and internal access rights.

  
  

In short, firms should assume that any information placed into a public AI system becomes accessible to a third party with broad visibility.

What Firms Should Do Now

Prohibit uploading client data into public AI tools

No client documents, numbers, internal notes, or account details should ever be entered into any external AI platform.

Create an approved AI tool list

Define which tools are allowed, which are restricted, and what information employees may provide to them.

Firms should also evaluate what the AI provider can access, even in paid tiers, and whether user content may be reviewed, retained, or shared.

Use enterprise versions rather than personal or individual accounts

Paid consumer versions of AI tools do not necessarily provide enhanced privacy or security.

Staff should not use personal accounts or individually paid subscriptions such as personal ChatGPT Plus, Claude Pro, or similar tools.

Firms should license business or enterprise versions that provide administrative controls, data segregation, logging, and contractual assurances on data handling and retention.

Enhance vendor oversight

Ask technology providers to disclose how they handle AI data, how long it is stored, whether staff can review it, and whether any data is used for model training or internal analytics.

Strengthen identity and access controls

Use multi-factor authentication across all systems, limit administrative rights, and monitor for automated or high-volume activity.

Update incident response plans

Include scenarios where an AI vendor becomes the source of exposure, compromise, or data retention risk.

Train employees

Staff need to understand the risks of AI-generated phishing, impersonation attempts, and data leakage, including the risks created when personal AI accounts are used for firm business.

Conclusion

The Anthropic incident underscores a broader risk for advisory firms. The most important lesson is not the use of AI to assist an attack. It is the level of visibility AI platforms may have into user activity and the volume of sensitive information firms may be placing into these systems without understanding how that data is stored, reviewed, or retained.

Advisory firms should take steps now to strengthen internal controls, formalize their AI-use policies, and limit unnecessary data exposure. These measures will support a more resilient cybersecurity program and align with the increasing regulatory expectations surrounding the use of emerging technology.

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Coulter Strategic Services provides customized compliance and regulatory consulting designed to meet the specific needs of each investment advisory firm. Services are tailored to the firm’s structure, business model, and regulatory obligations to help maintain an effective and sustainable compliance program aligned with current expectations. Contact us today to discuss your firm’s compliance program needs. Learn more at https://www.coulterstrategicservices.com/

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