What in the world is happening to our financial markets? Trading on the Nasdaq was halted on Thursday for more than 3 hours, and the only formal explanation that we got was that it was a “technical issue”. On Tuesday, Goldman Sachs made thousands of “erroneous trades” that are now being canceled. If those trades had not been canceled, it could have cost Goldman “hundreds of millions of dollars” according to the Wall Street Journal. How nice for them that they get a “do over”. When Knight Capital made a similar “trading error”, they were not so fortunate. Our financial system has become completely and totally dependent on computers, and that means that it is extremely vulnerable. After what we have witnessed this week, how can they actually expect us to have faith in these financial markets? And what happens if these “technical issues” get even worse?
The stoppage on the Nasdaq on Thursday was unprecedented. Trading in literally thousands of stocks and options was halted. Big names like Apple, Netflix, Intel and Facebook were affected.
As of right now, officials are not telling us what caused the “technical issue”, but there are rumblings that hacking was involved.
And the Nasdaq would hardly be the first exchange to be hacked. In fact, according to NBC News, about half of all the security exchanges around the world were hacked last year.
USA Today is suggesting that a group of Iranian hackers known as “Cyber Fighters of Izz ad-Din al-Qassam” may be responsible for what happened to the Nasdaq. Apparently they have been quite active since last September…
The first wave of denial-of-service attacks attributed to the Cyber Fighters of Izz ad-Din al-Qassam began last September and lasted about six weeks. Knocked offline for various periods of time were Wells Fargo, U.S. Bank, Bank of America, JPMorgan Chase & Co. and PNC Bank.
The second wave commenced in December and lasted seven weeks, knocking out mid-tier banks and credit unions.
And a third wave of high-powered denial-of-service attacks commenced in March targeting credit card companies and financial brokerages.
But of course the Iranians have not been the only ones hacking financial institutions. According to Gartner banking security analyst Avivah Litan, some “profit-minded hackers” have had quite a bit of success attacking U.S. banks…
More recently, a copycat group of profit-minded hackers has conducted denial-of-service attacks against certain U.S. banks as a smoke screen to divert attention while they execute an Ocean’s 11-style wire transfer fraud.
Litan earlier this month blogged about that caper. These bad guys, she says, set into motion sophisticated denial-of-service attacks that overwhelmed pretty sturdy bank network security. While tech staff labored manually to get the banks’ websites back into service, the crooks scrambled behind the scenes to extract funds from a bank employee’s privileged account, which they had gained access to.
Instead of getting into one customer account at a time, the criminals used the employee’s account to control the master payment switch for wire transfers, and moved as much money as they could from as many accounts as possible for as long as possible, Litan reports.
“Considerable financial damage has resulted from these attacks,” says Litan.
However, let’s certainly not blame all of the “technical issues” in the financial markets on hackers. What happened to Goldman Sachs on Tuesday appears to be very much their own fault…(...)Click here to continue reading the original ETFDailyNews.com article: What Is Happening To Our Financial Markets?You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)