Nasdaq Says Web-Facing Application Was Compromised

Nasdaq this weekend released a public disclosure that its Directors Desk application had been hacked, but it is emphasizing that its stock trading exchange was not affected.

"Through our normal security monitoring systems we detected suspicious files on the U.S. servers unrelated to our trading systems and determined that our Web-facing application, Directors Desk, was potentially affected, Nasdaq said in a statement. "The files were immediately removed and at this point, there is no evidence that any Directors Desk customer information was accessed or acquired by hackers. Our trading platform architecture operates independently from our Web-facing services like Directors Desk, and at no point was any of NASDAQ OMX's operated or serviced trading platforms compromised."

Although Nasdaq did not offer more detail on the breach, security experts around the Web were able to add some insight. In a blog posted Monday, researchers at anti-malware service provider Dasient dissected the attack and provided their feedback on what happened to Nasdaq.

"The target of this attack are the roughly 10,000 executives that use the Nasdaq information portal Directors Desk," Dasient said. "It appears that attackers were able to inject drive-by-download malware onto the website.

"Although sources familiar with the matter claim that the exchange's trading platforms were not affected, the risks of this attack are nonetheless very high. Visitors to the website would have been exposed to malware which could at a later time log their keystrokes and steal passwords to sensitive trading accounts or other information."

A source who is familiar with the Nasdaq security staffing situation said the organization has recently put a new security team in place, and inexperience might have been a factor in the breach. "Their security processes are immature and not well developed yet, being so new," said the source, who asked to remain anonymous. "From the inside, there are a lot of issues, and they are struggling to get their arms around everything."

Several vendors Monday said the hack could have been prevented.

"The real crime is that any organization can very well protect all data and mitigate the effect criminals can have fairly quickly and easily," commented Mark Bower, data security expert and VP product management at Voltage Security. "The focus should not have to be on compliance; it should be about doing the right thing and being responsible. If you have the ability to protect sensitive information but don't, that may very well boil down to criminal negligence."

"This breach demonstrates why organizations need better visibility into who and what is accessing their networks and their vital company data," said Frank Andrus, co-founder and CTO of network security vendor Bradford Networks. "Security starts with visibility."

"The Nasdaq security team apparently identified the issue internally, but the question is how long before the infection was detected," Dasient says in its blog. "How many days, weeks, or months was the infection out there? And how many users were exposed to the malware in the meantime?"

Nasdaq says it discovered the issue weeks before the breach disclosure, but did not go public at the request of law enforcement agencies that wanted to keep the investigation quiet.

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