Nasdaq glitch prompts examination of market technology

WASHINGTON — A three-hour pause in trading Thursday on the Nasdaq stock exchange raised anew concerns about cyber security and whether technology is overwhelming financial markets and regulators.

Trading of all securities listed on the tech-heavy Nasdaq, where roughly 1.6 billion shares are traded daily, ground to a halt at 18 seconds past 9:20 a.m. PDT.

Trading remained frozen for more than three hours — affecting big-name stocks such as Apple, Microsoft and Facebook — resuming roughly a half-hour before trading closed for the day.

In a statement more than five hours after the halt of trading, Nasdaq officials said a glitch in the system of quoting prices was the culprit and was resolved within half an hour. The rest of the delay, they suggested, was caused by the need to work with regulators and other stock exchanges to prepare for resumption of trading.

Later in the evening, officials described the problem as one of connectivity with an undisclosed market participant.

The Securities and Exchange Commission was mum for much of the day, but Thursday evening Chairman Mary Jo White issued a statement promising to gather Wall Street leaders and redouble her push for greater scrutiny of electronic trading.

"(The day's) interruption in trading, while resolved before the end of the day, was nonetheless serious and should reinforce our collective commitment to addressing technological vulnerabilities of exchanges and other market participants," she said.

White repeated a promise to push for new safeguards in electronic trading proposed by the SEC earlier this year. She also said she would convene a meeting of the exchanges and financial leaders "to accelerate ongoing efforts to further strengthen our markets."


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