Fergie's Tech Blog

Cyber Finance Threats: Toxic Information

Shane Harris:

Not that we need it, but here's yet another reason to worry about havoc in financial markets: U.S. intelligence officials increasingly fear that computer hackers could wreck banks and large financial institutions, or send stock markets into one more panicked frenzy, by covertly manipulating data and spreading false information.

In interviews and speeches over the past few months, senior counterintelligence and security officials laid out some dire scenarios. They're all predicated on a determined individual or small group fabricating information in such a way that the public sees a different picture of financial health than exists, either at a particular company or in broad markets.

For example, imagine a large brokerage finds itself suddenly saddled with huge losses because a disgruntled employee falsified information in the company's accounting systems, thus ensuring that billions of dollars in losses never show up on the books. Or think about the tumult that would ensue if someone hacked into a stock exchange and changed individual share prices, unleashing a flood of buy and sell orders.

These kinds of nightmare events shape the thinking of the senior Bush administration officials in charge of protecting the nation's computer infrastructure. They're concerned that financial institutions, while aware of the risks posed by lax information security, haven't taken bold enough steps to tighten up their own defenses and thus are imperiling a global system that is utterly dependent on accurate information.

posted by Fergie @ 10/17/2008 02:23:00 PM