Three federal agencies are now investigating the Twitter hack attack against the Associated Press earlier this week, which temporarily wiped out $136 billion from the stock market before the tweet was deleted and the Dow Jones Index bounced back.
While the Syrian Electronic Army claimed responsibility for the attack, the FBI is now investigating who was specifically behind fake tweet. The SEC and the CFTC meanwhile are investigating the impact of the attacks on the market.
SEC Commission member Luis Aguilar said the SEC hadn't yet determined who carried out the attack or why, the Wall Street Journal reported. "Where it appears that the securities markets have been manipulated in violation of the federal securities laws, the SEC should undertake a serious inquiry," Aguilar said.
John Nester, an S.E.C. spokesman, added:“We have standard operating procedures whenever there are market developments, and this is no exception. These procedures start with getting the facts about what occurred. We do not limit ourselves to looking at the catalyst for an event, but also its repercussions, to determine whether any further inquiries or actions are warranted.”
This week’s attack wasn’t the first time a news organization’s twitter account was hacked: CBS, NPR and the BBC have also been victims.
However, the A.P. incident had the biggest impact on the stock market. Within seconds of the fake A.P. tweet, the Dow Jones Industrial Average tumbled 150 points as trading algorithms dumped billions of dollars of stock, before it recovered five minutes later.
According to the New York Times, the CFTC is now investigating trading in 28 futures contracts that took place over that five-minute period, according to CNBC.
Meanwhile, high-frequency trading has once again come under fire for unleashing havoc on the markets.
Bart Chilton, a CFTC commissioner, noted in an interview with CNBC that high frequency traders did not have a “kill switch” in their technology to prevent them from acting on misinformation. “We need to set up basic rules of the road,” Chilton said. “We should not just accept technology blindly.” The selloff "raises larger questions about how technology is used" in the market, Chilton reportedly also said. "Somebody lost money, and not everybody who got out got back in."
Despite the recent twitter hacks, Wall Street firms are pressing ahead with plans to finally allow employees to use twitter at work, presumably so that they can judge information that appears on social media for themselves.
"It has not changed our plans. All aspects of any tool we use are carefully evaluated prior to implementation," a spokesperson at Bank of America, which plans to loosen restrictions for employees on accessing Facebook and Twitter, told the Wall Street Journal.
The Journal reports that Citi and Goldman Sachs are also considering allowing employees to access social media sites.
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio