Computer Hackers Target NASDAQ Exchange

(Reuters) – The
operator of the Nasdaq Stock Market said it found "suspicious files" on
its U.S. computer servers and determined that hackers could have
affected one of its Internet-based client applications.

There was no evidence the
hackers accessed or acquired customer information or that any of parent
company Nasdaq OMX Group Inc’s trading platforms were compromised, the
transatlantic exchange operator said on Saturday.

The
FBI and outside forensic firms helped conduct the investigation, though
Nasdaq OMX did not say when it was launched or when the suspicious
files were found. The files, found in a Web application called Directors
Desk, have been removed, the company said.

The
probe, which is continuing with the help of securities regulators,
comes as investors are growing increasingly anxious over the stability
and security of the high-speed capital markets, which in North America
and Europe are now mostly electronic.

"We
continue to evaluate and enhance our advanced security controls to
respond to the ever increasing global cyber threat and continue to
devote extensive resources to further secure our systems," Nasdaq OMX
Chief Financial Officer Adena Friedman and Vince Palmiere, the VP of
investor relations, said in a statement.

"Cyber attacks against corporations and government occur constantly," they added.

Nasdaq
OMX, which runs equity and derivatives exchanges in the United States
and Nordic European countries, did not give details on the hackers or on
what they were doing. "It’s nearly impossible to determine where it
comes from, but the authorities are tracking it," a spokesman said by
email.

FBI officials in Washington
declined to comment. The U.S. Department of Justice, which is also
involved, was not immediately available.

The
May "flash crash" — an unprecedented market crash and rebound that
took only 20 minutes — amplified growing worries over the stability of
the complex U.S. marketplace, renewing pressure on the U.S. Securities
and Exchange Commission and exchanges to crack down on wrongdoing.

Instances
of exchange computers being hacked are relatively rare, though the
prospect raises questions about the exposure of trading data and the
security of the national marketplace.

‘WATCHDOG IS A PAPER TIGER’

"It’s
scary to think that a major electronic exchange could be hacked," said
Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

"The
flash crash undermined investor confidence last year. It appears that
the SEC is powerless to act," he said. "The watchdog is a paper tiger."

The
revelation comes a week after an hour-long computer glitch locked the
prices of two key Nasdaq indexes, though exchange spokesman Frank
DeMaria said hackers played no role in that incident.

The computer hacking was first reported late Friday by the Wall Street Journal.

On Saturday, Nasdaq OMX said it had been
waiting until at the earliest February 14 before telling its customers,
based on a U.S. Justice Department request, to facilitate the
investigation.

Big Board parent
NYSE Euronext is the other main U.S. stock exchange operator. "We take
any potential threat seriously and we are continually working to ensure
that our systems operate at the highest levels of security and
integrity," NYSE spokesman Ray Pellecchia said.

(Additional reporting by Jeremy Pelofsky in Washington and David Gaffen in New York; editing by Mohammad Zargham)