{"id":19307,"date":"2011-02-11T11:30:42","date_gmt":"2011-02-11T16:30:42","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19307"},"modified":"2011-02-11T11:30:42","modified_gmt":"2011-02-11T16:30:42","slug":"nasdaq-hackers-put-vital-information-at-risk","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/02\/11\/nasdaq-hackers-put-vital-information-at-risk\/","title":{"rendered":"Nasdaq Hackers Put Vital Information at Risk"},"content":{"rendered":"

By Jared Levy, Editor, Smart Investing Daily, taipanpublishinggroup.com <\/a><\/strong><\/span><\/p>\n

You’re not going to find Friday’s security breach at the Nasdaq exchange as headline news in most publications. Given the seemingly more important things like the Packers winning the Super Bowl in Dallas or the inevitable spending cuts that are coming down the pike, why would we care about a person, group of people or foreign government gaining access to confidential data that could influence future stock prices or perhaps allow them access to the orders and prices themselves?<\/p>\n

As much as I love football and want our state and federal budgets balanced, this breach and others like it deserve not only the full attention of all Americans, but serious action. The effects of these actions could be catastrophic, not only for your personal data security, but the infrastructure that holds these digital markets together.<\/p>\n

If you thought the “flash crash<\/a>” was scary, imagine someone having the ability to alter stock prices or gather inside information about an earnings report and flood the market with buy or sell orders. (Hackers did NOT gain access to price servers in this breach apparently.)<\/p>\n

What Happened?<\/h3>\n

The NASDAQ OMX is an international stock exchange that is the primary trading exchange for over 2,800 stocks and options issues. The Nasdaq trades<\/a> between 2 billion and 3 billion shares daily and is a completely electronic exchange with no trading floors. Essentially it is a complex network of computers that links brokers, market makers and investors together and allows qualified participants to enter prices and share amounts to buy or sell. Your broker acts as the portal for you to trade on the Nasdaq, only allowing you to buy or sell what you specify and can afford.<\/p>\n

According to The Wall Street Journal<\/em> and several other sources, the Nasdaq’s servers were breached on Friday. Per a nebulous written statement by Nasdaq, the hackers were able to penetrate an area of the network called the “Directors Desk,” which is a platform that’s intended to allow company boards with over 10,000 separate members to communicate by securely storing and sharing private information and files (very disturbing). Nasdaq states that no data was lost in this breach and they have removed the “spyware” from their computers.<\/p>\n

This isn’t the first time the exchange has been hacked, this has happened several times this year already and, in fact, there have been reports of penetration into their servers going all the way back to the 1990s. <\/em><\/p>\n

According to industry experts, even though we have not seen anything catastrophic yet, professional hackers will often go on many reconnaissance missions, gathering data and planning a large attack or information dump later on. According to SecurityNewsDaily.com, the cloud-based platform that was hacked holds company data, recordings from virtual board meetings and even details about the 10,000-plus board members that use it. This data could potentially be used to defraud the members themselves, or gain illegal insight into a company’s health.<\/p>\n

Jeffery Carr<\/a>, who consults with U.S. and allied governments on cyber warfare, offered even further details on his blog concerning the events at the Nasdaq. I don’t know about you, but this scares me to death.<\/p>\n

Was it a coincidence that the Nasdaq wasn’t sending out quotes on any of their indexes on Friday morning? Perhaps, but as an investor, there are a couple small things you should know and might want to do, just in case there is a major data loss, error or another flash crash, or even if you simply lose power or crash your personal computer.<\/p>\n

(Investing doesn’t have to be complicated. Sign up for <\/em>Smart Investing Daily and let me and my fellow editor Sara Nunnally simplify the stock market for you with our easy-to-understand investment articles<\/a>.)<\/em><\/p>\n

Steps to Protect Yourself<\/h3>\n