NASDAQ Attack by Hackers – Reason for Worry?

Recently hackers went into NASDAQ’s system and put in some suspicious files which were later found by a team of forensic experts including FBI team members.  The markets in North America, Europe and in many countries of Asia – including India – are electronic.  If hackers could get in to probably one of the most secure system, then chances are that the other ones are more susceptible.  And that is the danger to the economic world.  One guy with a Jehadi mind can create havoc in the world markets on the day of his choice.

It is common to have attacks on business and government systems.  A lot of times the attacks occur as part of espionage by various countries – like China.  There have been attacks on these stock exchanges including NASDAQ.  In one such attack there was a financial angle which precipitated a chain of events:

More recently, high-speed trading software precipitated a “flash crash” on May 6. One trade worth $4.1 billion touched off a chain of events that ended with 30 stocks listed in the S&P 500 index falling at least 10 percent within five minutes. The drop briefly wiped out $1 trillion in market value as some stocks traded as low as a penny.

IN this case, Wall Street Journal is saying that hackers repeatedly penetrated the system for over an year!!  The application affected was the web facing app called Director’s Desk:

The mysterious hack — details are being kept under wraps by Secret Service and FBI investigators — included an attack against a Web facing application called Directors Desk.  The application is billed as a “secure, online Board portal that provides corporate governance software, communication tools and Board management software that increase Board effectiveness.”

What could the motives be?  Well, they could be any of the following:

• unlawful financial gain,
• theft of trade secrets
• national-security threat designed to damage the exchange.

Also, according to some experts, a system like DIrector’s Desk could be a back door entry mechanism for systems not directly connected to Web, which could be very easily manifested over the period the attacks occured.

The official statement from the NASDAQ OMX group is:

Through our normal security monitoring systems we detected suspicious files on the U.S. servers unrelated to our trading systems and determined that our web facing application Directors Desk was potentially affected. We immediately conducted an investigation, which included outside forensic firms and U.S. federal law enforcement. The files were immediately removed and at this point there is no evidence that any Directors Desk customer information was accessed or acquired by hackers. Our trading platform architecture operates independently from our web-facing services like Directors Desk and at no point was any of NASDAQ OMX’s operated or serviced trading platforms compromised.

Subsequently, the U.S. Department of Justice requested that we refrain from providing notice to our customers until, at the earliest, February 14, 2011, in order to facilitate the continuing investigation. NASDAQ OMX was honoring the U.S. Government’s request to delay notification, but when a story ran in the media on Saturday, February, 5, 2011, regarding a hacking incident at NASDAQ OMX, we immediately decided, in consultation with the authorities, that we must inform our customers.

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. Cyber attacks against corporations and government occur constantly. NASDAQ OMX remains vigilant against such attacks. We have been working in cooperation with the Government’s ongoing investigations and have received their technical advice for which we are appreciative.