Greifeld statement: Investors left baffled at Nasdaq shutdown
(Guardian (UK) Via Acquire Media NewsEdge) Nasdaq's chief executive has broken his silence about the stock exchange's unprecedented three-hour outage on Thursday, but his television interview left investors baffled as to the cause of the shutdown.
Robert Greifeld provided more details about the glitch that halted trading of some stocks, including Facebook and Apple, across 13 major exchanges.
In an interview with American news channel CNBC he revealed that the exchange had taken only 30 minutes to fix the software problem. Greifeld said the New York exchange intentionally kept the service shut down for hours afterwards in order to perform technical checks.
The primary complaint from many traders was that Nasdaq did not keep them informed. Arthur Levitt, former chairman of the securities and exchange commission, said: "The worst part of all of this is the lack of disclosure. The lack of transparency. This is inexcusable."
Greifeld bristled at Levitt's words, saying: "I have to disagree in a quite emotional way with that statement." He said the exchange provided updates to major investment banks, investors and other exchanges, if not the press or public. "We have to focus on the operational aspects of the problem while the problem is transpiring."
Howard Lindzon, CEO of social media investing site StockTwits, said Greifeld's explanation left him unconvinced.
"I think the market is so complex and the machinery is so complex and . . . I don't think there's anything you can do any more. It's so botched." He added: "They can't be shamed into fixing the system."
Greifeld made oblique references to an external problem that may have shaken Nasdaq's system.
"I think where we have to get better is what I call defensive driving," he said. "Defensive driving means what do you do when another part of the ecosystem, another player, has some bad event that triggers something in your system?"
Some could not square Greifeld's explanation of the Nasdaq software glitch with his references to "another player".
Michael Driscoll, a former Bear Stearns trader who teaches at Adelphi University in New York, said computer errors were the price of doing business in the modern world. "It's going to happen again," he said. "It's the nature of computers."
Robert Greifeld said Nasdaq needed to improve its 'defensive driving'
(c) 2013 Guardian Newspapers Limited.
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