2nd UPDATE: Hong Kong Exchanges Battles Hackers Of News Website For Second Day
August 11 2011 - 8:45AM
Dow Jones News
The operator of Hong Kong's stock exchange on Thursday continued
to battle a cyber-attack against its corporate filings website, a
breach that has prompted the city's sole exchange operator to
reconsider the way it disseminates information to investors.
HKEx Chief Executive Charles Li Thursday told reporters the
"coordinated, sustained hacking attack" that at times made issuers'
regulatory filings inaccessible persevered for a second day, but
that HKEx had last night successfully implemented a filter
mechanism to fend off attacks. For the most part the news website
appeared to be functioning normally Thursday.
Li said the exchange plans to launch temporary measures
beginning Friday that will broaden the distribution methods for
listed companies' regulatory filings and that over the long-term,
the stock exchange will work with the city's securities regulator
and others to "explore the feasibility of an enhanced distribution
model" for corporate filings beyond HKEx's news website.
Li said HKEx still doesn't know who the hackers are or what
their motivation is.
HKEx Chairman Ronald Arculli brushed off fears Thursday that the
hacking was an attempt to get access to price-sensitive information
that could be used to profit from trades on the exchange. "That
doesn't hold," he told Dow Jones Newswires.
The nature of the incident -- which involved the site being
bombarded with traffic, knocking it offline in what is known as a
"distributed denial-of-service" attack-- isn't consistent with such
a plan, he said.
Companies such as PayPal and MasterCard, as well as government
sites including the U.S. Central Intelligence Agency, have been
victims of such attacks, which are executed by hackers who use a
master computer to take over others using the internet. The "zombie
machines" then flood their target with so many requests to view a
page that the site can't respond to real visitors.
The attack, which comes amid heightened global concern over
online hacking, has raised questions over the preparedness of Hong
Kong's bourse, the key international exchange for trading Chinese
companies. Some market participants have criticized the city's
monopoly exchange operator for its general lack of technological
prowess.
"HKEx is currently undertaking a decade of IT investment over
the next few years," said Credit Suisse's Arjan van Veen.
"Singapore has a 1.5 to two year lead on them in terms of IT
investment in areas such as upgrading trading platforms and data
centers," said the analyst, who covers HKEx and Singapore Exchange
Ltd. (S68.SG).
The exchange operator has said its trading systems weren't
breached by the hacking.
Li called the exchange operator's decision to halt trade in
seven listed companies because of the website failure a "painful"
one. But he and Arculli defended the move, which they said was
necessary to ensure all investors have equal access to corporate
filings.
"It was a good call to suspend the trade of the companies that
had issued price-sensitive information," said shareholder activist
and former HKEx director David Webb. "If they'd carried on without
everyone having access to the announcements it would have been
unfair."
Companies that were suspended from trade Wednesday included blue
chips HKEx, Cathay Pacific Airways Ltd. (0293.HK) and banking giant
HSBC Holdings PLC (HBC). The three, together, account for around
18% of the benchmark Hang Seng Index's weighting.
-By Kate O'Keeffe, Dow Jones Newswires; 852-2802-7002;
kathryn.okeeffe@dowjones.com
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