More On Legal & Compliancefrom The Advisor's Professional Library
- Registration Requirements for Investment Advisor Representatives (IARs) When individuals launch an advisory firm, they must avoid marketing themselves or the firm as investment advisors before they are properly approved and registered. Otherwise, they are subject to severe penalties.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
After The Wall Street Journal reported late Friday that Nasdaq had been hacked, the exchange disclosed Saturday that it had found “suspicious files” on its servers, and that hackers could have affected its applications. The files have since been deleted.
Reuters reported that Nasdaq OMX did not give details on the hackers or on the object of their activities, saying only that there was no evidence that customer information was accessed or acquired, or that any of the trading platforms were accessed.
Adena Friedman, Nasdaq OMX’s chief financial officer, and Vince Palmiere, vice president of investor relations, said in a statement, "We continue to evaluate and enhance our advanced security controls to respond to the ever increasing global cyber threat and continue to devote extensive resources to further secure our systems.” They added, “Cyber attacks against corporations and government occur constantly.”
Nasdaq OMX also did not say when the attack took place, or when the files were found. The FBI and outside forensic companies helped to conduct the investigation, it said, and a spokesman was quoted in the report saying, "It's nearly impossible to determine where it comes from, but the authorities are tracking it." The company had not intended to notify customers until at least Feb.14, in order to comply with a U.S. Justice Department request to aid its investigation.
Concerns about the stability of the marketplace and data security and exposure have grown since the "flash crash" in May, when within 20 minutes the market crashed and then recovered. Further adding to concerns is the fact that last week two key Nasdaq indices had their prices locked for an hour thanks to a computer problem. Exchange spokesman Frank DeMaria denied that hackers had anything to do with what happened.