White House sees no cyber attack on Wall Street
WASHINGTON (AP) — The White House’s homeland security and counterterrorism adviser says there is no evidence that a cyber attack was behind the chaos that shook Wall Street last Thursday.
John Brennan told “Fox News Sunday” that officials have uncovered no links suggesting that cyber attacks caused turbulence that sent the Dow Jones industrials plunging almost 1,000 points before staging a partial recovery at the end of the day.
The market already was weak because of the spreading European debt crisis. Some have speculated that a typographical error might have triggered the massive computerized sell-off.
Regulators and market officials are scouring millions of trades to understand what caused the volatility. The Securities and Exchange Commission and the Commodity Futures Trading Commission are relying on self-regulatory offices at the New York Stock Exchange and elsewhere to help them identify questionable trades.
In a joint statement Friday, the SEC and CFTC identified one possible cause for Thursday’s plunge: Conflicting trading rules for different markets.
Markets generally write and enforce their own varying rules, under the oversight of the SEC and CFTC.
The SEC will meet Monday with representatives from major exchanges, according to Joe Ratterman, CEO of BATS Global Markets, one of the largest U.S. trading networks. Ratterman said Friday that SEC officials called him at his Kansas City, Mo., office late Thursday and again on Friday seeking information on the unusual trading. BATS had to cancel 540 trades.
New York Stock Exchange Euronext CEO Duncan Niederauer told CNBC on Friday that his exchange canceled 4,000 trades. Nasdaq declined to give a number. Direct Edge, the third-largest U.S. exchange, reviewed some of the 10 million trades made Thursday and found 2,000 that had to be canceled.
Nasdaq OMX Group and NYSE Euronext in a joint statement Sunday said they are committed to working closely with each other, the Securities and Exchange Commission and other regulators to determine the cause of Thursday’s market plunge and develop effective ways to make the markets more stable.