Tags: Lawmakers Probe Exchange Security in Wake of Nasdaq Breach

Lawmakers Probe Exchange Security in Wake of Nasdaq Breach

Tuesday, 08 Feb 2011 02:15 PM


U.S. House Republicans are seeking information on computer-network security from regulators and executives from 10 exchanges and clearinghouses amid claims of possible computer hacking into a Nasdaq OMX Group Inc. website.

“The world must have confidence in the technological security of our financial markets,” Representatives Spencer Bachus of Alabama and Scott Garrett of New Jersey said in the letter dated today.

Bachus, the chairman of the House Financial Services Committee, and Garrett, who leads the panel’s capital markets subcommittee, asked recipients to describe — without divulging specific information about their own networks — what they’re doing “to ensure the ongoing integrity and security of exchange trading systems and clearinghouses.” The lawmakers asked that responses be delivered by Feb. 28.

Nasdaq OMX, the second-largest U.S. exchange operator by market value, said in a Feb. 5 statement that it discovered suspicious files in its web-based Directors Desk application and “immediately conducted an investigation, which included outside forensic firms and U.S. law enforcement.”

None of Nasdaq OMX’s trading platforms were “compromised” by the files, the New York-based company said.

Bachus and Garrett sent copies of the letter to Nasdaq OMX Chief Executive Officer Robert Greifeld, as well as Terrence Duffy, the executive chairman of CME Group Inc., and William Brodsky, the CEO of the Chicago Board Options Exchange Inc. The letter also was addressed to CEO Duncan Niederauer of NYSE Euronext, the largest U.S. exchange operator, and six other executives.

Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler were also asked to provide information.

Menendez Letter

Nasdaq OMX’s investigation has become a bipartisan issue on Capitol Hill. U.S. Senator Robert Menendez, a New Jersey Democrat, sent a letter to Schapiro yesterday telling her that the “SEC and other government agencies need to step up and address these concerns without delay.”

Menendez, in a letter that was also sent to Attorney General Eric Holder and Homeland Security Secretary Janet Napolitano, said the SEC should “consider investigating the extent to which hacking can disrupt trading platforms.”

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