Nasdaq CEO Defends Exchange After 'Flash Freeze'

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Published August 23, 2013

| FOXBusiness

Nasdaq CEO Robert Greifeld in an interview with FOX Business on Friday defended the all-electronic exchange's handling of the three-hour outage dubbed the "Flash Freeze," calling it an internal glitch and easing fears that it was triggered by some kind of cyber attack. 

Greifeld told Fox Business's Liz Claman there was no indication it had "anything to do with" hacking or another type of cyber attack, but was instead insulated to an internal glitch.

The Nasdaq OMX Group's (NDAQ) New York-based digital exchange, which hosts major Fortune 500 companies, including technology giants Google (GOOG), Facebook (FB) and Apple (AAPL), opened normally Friday morning. 

Thursday's outage was blamed on a highly technical issue involving the system it uses to disseminate price quotes. The Securities Information Processor (SIP) consolidates and distributes all prices for the industry.

“There was a connectivity issue between an exchange participant and the SIP,” Nasdaq said in a statement late Thursday after the market closed. “The cause of the issue has been identified and addressed.”

The problem further underscores the growing complexity of electronic equity markets that have given birth to new types of headaches, including crashes and outages, that were, for the most part, unfathomable a decade ago.

“We certainly are deeply disappointed with what happened yesterday,” Greifeld told FOX Business. “What we have to do is improve what I call defensive driving,” referring to the number of market participants directly involved with and within the Nasdaq systems every day.

“We have to handle some of the bad actions of people connected to us,” he said.

The outage only lasted for about 30 minutes, the Nasdaq said. The rest of the two-and-a-half hours was spent ensuring the reopening would be smooth and fair. Throughout the process Greifeld said there were open lines of communication with market participants and regulators.

Trading had resumed for about an hour on Thursday without incident before the U.S. markets closed.

“We came live quite successfully and finished the day in a normal course of business,” Greifeld said.

URL

http://www.foxbusiness.com/investing/2013/08/23/nasdaq-on-track-to-open-normally-after-flash-freeze-ceo-defends-exchange/