[ISN] The Nasdaq Hacking Case Raises Big Red Flags for Exchanges

http://www.dailyfinance.com/story/investing/the-nasdaq-hacking-case-raises-big-red-flags-for-exchanges/19830853/

By ALEX SALKEVER 
Daily Finance
02/06/11

Revelations over the past few days that hackers had penetrated certain 
systems at the Nasdaq stock exchange are reverberating throughout the 
financial world. Indeed, the case is shaking some bedrock assumptions of 
a digitized, high-speed, globally connected stock market run essentially 
by computers with minimal human interaction. Nasdaq officials say the 
computer systems that actually execute buy and sell orders for the 
Nasdaq OMX Group (NDAQ) were not compromised.

Instead, they say the hacking allegedly affected Nasdaq's Directors Desk 
service, a subsidiary that offers Web-based tools to make it easier for 
boards of directors to prepare for, participate in and follow up on 
board meetings. Part of the service includes document-sharing tools for 
things like preliminary drafts of earnings reports and other key data 
and documents.

Directors Desk's roughly 10,000 clients include a Who's Who of top 
publicly traded companies. The concern is that enterprising hackers 
could have gleaned key details from board meetings if they gained full 
access to the service, allowing them to possibly trade on nonpublic 
material information. On the Directors Desk website Nasdaq says the 
service offers "The highest level of security available to protect 
confidential board communications."

[...]


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