Nasdaq OMX Group Inc. halted trading for three hours yesterday to protect the integrity of markets as a technology malfunction left some investors without stock quotes, Chief Executive Officer Robert Greifeld said in his first public remarks since the incident.
The exchange operator was in constant communication with rivals during the outage and decided to halt trading of listed stocks to prevent “information asymmetry” among traders, Greifeld said in interviews at Nasdaq’s offices with Bloomberg Television’s Betty Liu and Andrew Ross Sorkin on CNBC. Greifeld said he supports developing a backup data feed to prevent the issue from happening again.
“The general theme we’re focused on going forward is that we have to improve our defensive driving ability,” Greifeld told Bloomberg TV. “This system has been around for 20 years, it works and it works remarkably well. Then things happen in the external environment that causes a problem.”
A faulty connection between the two biggest operators of U.S. stock exchanges brought half of the world’s largest equity market to a standstill, the second time this week U.S. trading was shaken by a computer malfunction.
Connectivity was disrupted between NYSE Arca (NYX), where about 11 percent of American share volume occurs, and the data processing subsidiary of Nasdaq Stock Market, home to 2,150 U.S. companies, according to a person with direct knowledge of the matter. That led Nasdaq to freeze thousands of stocks from Apple Inc. to Facebook Inc. (FB) that trade on about 50 markets from Kansas to New Jersey for more than three hours.
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