January 31, 2011

Officials at the London Stock Exchange and UK security services are investigating a possible breech of its open-sourced trading platform, according to a report in the Times of London.

Officials believe that the hack attack occurred last year and may have been responsible for a UK Flash Crash late last summer.

On August 24, 2010, the stock values of five companies traded on the LSE collapsed, such as BT, whose shares lost 968 million sterling in value, and the LSE shut down trading for the day. The exchange eventually blamed an incorrectly entered price on a large number of stock orders, reports Computerworld UK.

The Times is also casting doubts on the official explanation for the May 6th flash crash that originated from a mid-western US investment firm. The report says that security officials have not ruled out an online attack "by groups seeking to wipe billions off the value of companies, panicking markets and destabilizing the West's financial system," reports Finextra.

Anonymous sources in the Times story believe that the cyber attack may have originated from Russia, and that US exchanges have been the victim of cyber attacks as well.

According to Computer World UK, The LSE's Turquoise trading platforms runs on Linux, the open-sourced operating system. The bourse is set to upgrade to new Linux systems on its main exchange in the coming two weeks.

ABOUT THE AUTHOR
Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining ...