Blog article
See all stories »

Nasdaq Breach Highlights Security Issues in Capital Markets

When part of an organization’s system gets compromised, its entire reputation can take a hit. Nasdaq OMX Group Inc.’s confirmation Monday that one of its systems had been hacked emphasizes wider security issues facing the capital markets.

The public still doesn’t know whether the attack was an attempt to look around the Web-based system — in which case attackers seem to have succeeded — or to gain access to the Nasdaq stock exchange, which probably failed.

Unknown hackers breached the board portal program Directors Desk, which allows major corporate players to share confidential appointments and reports. The program belongs to the company that runs Nasdaq, a major stock exchange. Routine sweeps of the portal last year uncovered malware, malicious code to help hackers compromise computer systems.

Technology services such as the board portal reside apart from the trading system. Still the Secret Service, Federal Bureau of Investigation and an elite cyber security team associated with Carnegie Mellon University are among those helping Nasdaq with this issue, according to The Wall Street Journal.

“This will be a concern to listing companies and other firms doing business with Nasdaq,” Tabb Group LLC CEO Larry Tabb told The New York Times. The head of this Westborough, Mass.-based financial service research firm added that Nasdaq will “have to put a full-court press on solving the problem as well as a P.R. press to show the listing firms that they can be confident their data was not compromised.”

Theories about the cyber attacks include hackers seeking a backdoor to the trading platform, as well as foreign countries exploring how U.S. companies think. But most experts seem to think this is an attempt to gain access to executive calendars in hopes of gleaning inside information.

The Nasdaq stock exchange remains uncompromised, sources say, and many trading firms announced they would continue using Nasdaq.

These attacks may not visibly affect electronic trading, but their effects could stifle burgeoning technology in the trading sphere. As Patrick Healy, CEO of Issuer Advisory Group LLC and advisor to firms considering listing on the exchange told The Wall Street Journal: “This is not something that issuers are just going to ignore.”


Comments: (0)