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Russian Hacking of Nasdaq: Further Color

Posted by Larry Doyle on July 21, 2014 10:13 AM |

Global risks on many fronts remain exceptionally elevated.

From the Ukraine to a number of hot spots in the Middle East, to the South China Sea, to our southern border, global risk is rampant. Each of these situations entails real human suffering and generates strong reactions and appropriate empathy.

Yet in the midst of each of these stories, there was another story that broke last week that deserves far greater attention than it has received in terms of our national security. I refer specifically to a story released by Bloomberg Businessweek entitled How Russian Hackers Stole The Nasdaq:

In October 2010, a Federal Bureau of Investigation system monitoring U.S. Internet traffic picked up an alert.

The signal was coming from Nasdaq. It looked like malware had snuck into the company’s central servers. There were indications that the intruder was not a kid somewhere, but the intelligence agency of another country. More troubling still: When the U.S. experts got a better look at the malware, they realized it was attack code, designed to cause damage.

This story would seem to provide sufficiently meaningful background material for a James Bond thriller. I strongly encourage readers to review it in its entirety. When one nation, in this case Russia, is found to have infiltrated the inner systems of one of our major equity exchanges, we should all be justifiably concerned.

Regular readers with sharp memories may recall that I had referenced a situation such as this a year ago. Let’s backtrack and revisit my commentary, Sex, Lies, Stupidity, Oh My: SEC Whistleblower David Weber Vindicated, Receives Huge $ettlement, in which a release to which I linked offered the following:

The September 17, 2012 report also found that Weber did not mischaracterize evidence when he discussed a matter of potential “national security” and “possible espionage” by possible “foreign nationals” related to a case Weber was investigating that “involved unencrypted computer hard drives that contained sensitive stock exchange information.”

How was Weber treated for bringing forth such critically important and sensitive information on a matter of national security? The SEC under then chair Mary Schapiro fired Weber. As the prior link highlights, Weber fought for justice, was subsequently vindicated, and received a significant settlement. All of this goes to the question as to the manner in which the SEC is run.

1. Why would the SEC fire an individual who brings forth critically important evidence of such a sensitive nature?

2. When a whistleblower such as Weber gets terminated — despite being ultimately vindicated — what message does that send to others at the SEC and elsewhere who might think about blowing the whistle?

3. If Russia did, in fact, penetrate the computer system of the Nasdaq, how do we know that they have not done the same elsewhere?

Indeed, the global landscape is filled with risks.

One would have hoped that those here at home who have tried to do the right thing in terms of bringing forth information that impacts the lives of so many would be embraced rather than intimidated and/or fired. Regrettably, Uncle Sam’s treatment of so many whistleblowers during this administration has shown that we face real risks from within just as we do from beyond our borders as well.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

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