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Hackers Penetrate NASDAQ Networks

Latest Update > NASDAQ Issues Statement on Directors Desk Security Breach

Latest Update > NASDAQ Issues Statement on Directors Desk Security Breach

In the past year, hackers have reportedly managed to penetrate computer networks that power the NASDAQ stock market, according to a report from the Wall Street Journal.

NASDAQ HackedInvestigations are underway and the Secret Service is involved, but the trading platform which executes trades has not been compromised. Devlin Barrett who wrote the article, notes that this wasn’t a single incident. “Hackers have repeatedly penetrated the computer network of the company that runs the Nasdaq Stock Market during the past year, and federal investigators are trying to identify the perpetrators and their purpose, according to people familiar with the matter,” Barrett writes.

Several stories came out this week surrounding concerns that cyber-attackers are successfully breaching electronic trading systems not merely for the purpose of stealing funds, but to actively “spread panic among markets and destabilize western financial institutions.”

SecurityWeek contributor Matt Hines published a column earlier today on how the art of subtle manipulation via cyber attacks could slowly turn electronic markets on their heads by corrupting their very legitimacy. The dangers certainly do appear to be a clear and present danger. “Print this post out, ball it up, and throw it on the FUD fire if you like, though I myself believe it to be true,” Hines writes.

Hedge fund manager Doug Kass of Seabreeze Partners Management, called a “Master market timer and predictor” by CNBC, made a bold prediction during CNBC’s Fast Money program in December 2010. “The Internet becomes the tactical nuke of the digital age. I believe that cybercrime is going explode exponentially next year as the Web is invaded by hackers. And My surprise is that we will see a specific attack on the New York Stock Exchange which has a profound impact,causes a week long hiatus in trading which will cause abrupt slowdown in travel and domestic business,” Kass said.

The NYSE’s Web site ( has been targeted in the past with denial of service’ attacks but without success, according to NYSE reports. Importantly, the NYSE.Com Web site is not connected to any of the trading operations and even if such attack took offline it wouldn’t affect trading operations, of which most of the infrastructure is over private networks and not the public Internet.

“People familiar with the Nasdaq matter said the Secret Service first began investigating last year. Investigators have informed White House officials of the case, according to the people familiar with the situation, who said that such a move is typical in hacking investigations, particularly in the early stages of the probes,” Barrett added.

Cyber attacks on financial markets are nothing new. But are they prepared for a new era of attacks with new and more powerful tools in the hands of attackers?

Written By

For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.

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