Nasdaq Itself Hacked (NDAQ, NYX, CME)

Another blow to investor confidence in the markets was received when news that Nasdaq NDAQ was hacked. Malicious programs were installed on the web-accessible system, Director's Desk, that facilitates communication and file sharing among corporate officers, according to Nasdaq. The hack was unrelated to services involved with trading of any kind. Nevertheless, it is disconcerting to know how easily stock exchange technologies were hacked. For reference's sake, there are three major exchanges in the US, all of which are publicly-traded companies. First, Nasdaq trades on its own exchange under the symbol NDAQ. Second, the CME group - a Chicago-based exchange - also trades on the Nasdaq under the symbol CME. Finally, the New York Stock Exchange trades on its own market under the symbol NYX. Even though the infiltration did not involve trades, the Director's Desk service stores documents such as earnings drafts, company statistics, etc. and may provide the hackers the opportunity to profit off of such inside information according to the the Wall Street Journal. This also may not be the first time hackers have infiltrated the Nasdaq. There were allegations that hackers first gained access to the Nasdaq late last year, according to the Wall Street Journal article. To cause havoc or gain access to critical inside information? Motive unknown but it is clear that security in stock exchanges must be heightened to prevent infiltration and uphold investor confidence in the trading platforms. In addition to the Nasdaq hacking, investors have further reason to be distrustful of the markets presently. There were more arrests last week in the Securities and Exchange Commission insider trading probe. As little as 15 hedge funds received insider information from consultants and other employees from Primary Global Research, according to the Financial Times.