Hackers infiltrate Nasdaq service that handles firms' confidential communications

By Peter Svensson
Sunday, February 6, 2011

NEW YORK - Hackers broke into a Nasdaq service that handles confidential communications for some 300 corporations, the company said Saturday, exposing another vulnerability in the computer systems Wall Street depends on.

The intrusions did not affect Nasdaq's stock trading systems and no customer data were compromised, Nasdaq OMX Group said. Nasdaq is the largest electronic securities trading market in the United States, with more than 2,800 listed companies.

A federal official told the Associated Press that the hackers broke into the service repeatedly over more than a year. Investigators are trying to identify the hackers, the official said. The motive is unknown. The official spoke on the condition of anonymity because the inquiry by the FBI and Secret Service is continuing.

The service

The targeted service, Directors Desk, helps companies share documents with directors between scheduled board meetings. It also allows online discussions and Web conferencing within a board. Since board directors have access to information at the highest level of a company, penetrating the service could be of great value for insider trading.

Nasdaq OMX spokesman Frank DeMaria said the Justice Department had requested that the company keep silent about the intrusion until at least Monday. However, the Wall Street Journal reported the investigation on its Web site late Friday, prompting Nasdaq to issue a statement and notify its customers.

DeMaria said Nasdaq OMX detected "suspicious files" during a regular security scan on U.S. servers unrelated to its trading systems and determined that Directors Desk was potentially affected. It pulled in forensic firms and federal law enforcement for an investigation. They found no evidence that customer information was accessed by hackers.

Rich Mogull, an analyst and chief executive with the security research firm Securosis, said Web-accessible services such as Directors Desk are a prime target for hackers and have sometimes been a back door for systems that aren't directly connected to the Web.

The presence of files on the Directors Desk system and the claim that no customer information was compromised could indicate that hackers were able to get in but not complete their attack, he said.

The warnings

Computer security experts have long warned that many companies are not doing enough to protect sensitive data, and recent events have underlined the point.

The secret-spilling organization WikiLeaks has published confidential documents from banks in Switzerland and Iceland and claims to have incriminating documents from a major U.S. bank, possibly Bank of America.

In 1999, hackers infiltrated the Web sites of Nasdaq and the American Stock Exchange, leaving taunting messages, but Nasdaq officials said then that there was no evidence the break-ins affected financial data.

Nasdaq OMX chief executive Bob Greifeld said in a statement that cyber-attacks against corporations and government are constant and that the company is vigilant in maintaining security.

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