By Brenda Flanagan
Its computer crashed and grounded United Airlines: strike one. Then a software glitch disabled the NYSE: strike two. Then panicky traders seeking information crashed the Wall Street Journal website: strike three. People freaked out.
“I think it was quite reasonable to think that perhaps there was a cyber attack was going on,” said Scott Rothbort, finance professor at Seton Hall University.
Security expert Rothbort says with the Exchange offline for almost three hours, people hyperventilated even though it tweeted an explanation: the problem was an “internal technical issue and not the result of a cyber breach.”
Homeland Security reassured folks, too.
“It appears from what we know at this stage that the malfunctions at United and the Stock Exchange were not the result of any nefarious actor,” said Homeland Security Secretary Jeh Johnson.
Moreover, trading continued — albeit at a lower volume — at other, electronic stock exchanges. And the market reopened today without a hitch.
But the uneasiness lingers.
“So it really didn’t impact trading at all, but the real impact is one that was more psychological,” Rothbort said.
Former exchange executive Rich Torrenzano agrees.
“Well it clearly had an impact of credibility for the exchange, not only in terms for the operation and lack of trading but also in terms of computer system not working correctly,” he said.
He blames bad crisis management.
“I think they did a very good job operationally, fixing what they needed to fix before the close of the trading yesterday. I think they could’ve done a much better job in getting out there with information to market participants, the media and public at large,” he said.
“It gets your attention. It’s got people talking,” said George Calhoun.
Calhoun teaches quantitative finance at Stevens Institute. He thinks people are missing the biggest message from yesterday’s shutdown.
“If somebody wanted to fire a shot across our bow — in cyber security language — taking down the biggest stock exchange, the biggest newspaper and the second biggest airline for a couple hours in the middle of the same day would be one was you might design that shot across the bow,” he said.
Calhoun claims the stock exchange computer systems function in a hyper high tech global flow of information — open to attack.
“What we hear from the big banks, the financial industry, is they are almost in a 24/7 state of siege from cyber attacks from the outside. It’s become a very pervasive problem for them. It is vulnerable. No question in the minds of people on the inside of the industry — it is vulnerable,” he said.
Analysts say the more complex a system gets, the more vulnerable it can become. And despite firewalls, the exchange is only as strong as its weakest link.