Robert Greifeld disagrees in 'emotional way' with traders' complaints that they weren't informed throughout the trading halt
Nasdaq's CEO, Robert Greifeld, broke his silence about the stock exchange's unprecedented two-hour outage on Thursday, but his television interview received low marks from some investors who remained baffled by the shutdown.
Greifeld spoke with cable-news channel CNBC in a 15-minute interview in which he provided more details about the glitch that halted trading of some stocks across 13 major exchanges. He revealed that the exchange had taken only 30 minutes to fix the software problem, which had sent stock quotes only to big professional investors while small investors could not see quotes. Greifeld said the exchange intentionally kept service out for hours to perform technical checks.
The primary complaint from many traders was that Nasdaq did not keep them informed. Arthur Levitt, the former chairman of the Securities and Exchange Commission, told reporters, "The worst part of all of this is the lack of disclosure. The lack of transparency. This is inexcusable."
Greifeld bristled at Levitt's statement, telling CNBC: "I have to disagree in a quite an emotional way with that statement."
He said the exchange provided updates to major investment banks, investors and other exchanges, if not the press and the general public. "We have to focus on the operational aspects of the problem while the problem is transpiring," he told host Andrew Ross Sorkin.
The decision to update market players but not the public struck some as a feint. "I don't see why they couldn't do both," said Josh Brown, a vice president at Fusion Analytics and market commentator.
Howard Lindzon, the CEO of social media investing site StockTwits and the manager of several small funds, said Greifeld's explanation left him unconvinced.
"I think the market is so complex and the machinery is so complex and ... I don't think there's anything you can do any more. It's so botched," Lindzon said. He added: "They can't be shamed into fixing the system."
Greifeld made oblique references to an external problem that may have shaken Nasdaq's system and forced the exchange to engage in "defensive driving", but he did not elaborate.
"I think where we have to get better is what I call defensive driving," Greifeld said. "Defensive driving means what do you do when another part of the ecosystem, another player, has some bad event that triggers something in your system?"
Some could not square Greifeld's explanation of the internal Nasdaq software glitch with his references to "another player," which he noted again later: "We spend a lot of time and effort where other things happen outside our control and how we respond to it. This is an example of that."
Brown, of Fusion Analytics, said Greifeld's actions counted more than his tone.
"I thought they did a better job fixing the problem than communicating about it," Brown said, noting that trading resumed without incident. "The first thing they did was halt trading so that we didn't have one of those Facebook fiascos. They probably averted chaos. I thought they actually handled things really well, it's just that they were really bad about getting out front."
Michael Driscoll, a former Bear Stearns trader who now teaches at Adelphi University, said he doubted Greifeld could have said anything that would have comforted investors.
"It was a slow thursday in August when there was not much going on," Driscoll said. "I'm not sure they could have handled it. It was three hours. What's the difference?"
Driscoll, Brown and Lindzon all chalked up the computer errors to the price of doing business in the modern world.
"It's going to happen again," Driscoll said. "It's the nature of computers.
The Securities and Exchange Commission said it was monitoring the situation. Reported by guardian.co.uk 2 hours ago.
Nasdaq's CEO, Robert Greifeld, broke his silence about the stock exchange's unprecedented two-hour outage on Thursday, but his television interview received low marks from some investors who remained baffled by the shutdown.
Greifeld spoke with cable-news channel CNBC in a 15-minute interview in which he provided more details about the glitch that halted trading of some stocks across 13 major exchanges. He revealed that the exchange had taken only 30 minutes to fix the software problem, which had sent stock quotes only to big professional investors while small investors could not see quotes. Greifeld said the exchange intentionally kept service out for hours to perform technical checks.
The primary complaint from many traders was that Nasdaq did not keep them informed. Arthur Levitt, the former chairman of the Securities and Exchange Commission, told reporters, "The worst part of all of this is the lack of disclosure. The lack of transparency. This is inexcusable."
Greifeld bristled at Levitt's statement, telling CNBC: "I have to disagree in a quite an emotional way with that statement."
He said the exchange provided updates to major investment banks, investors and other exchanges, if not the press and the general public. "We have to focus on the operational aspects of the problem while the problem is transpiring," he told host Andrew Ross Sorkin.
The decision to update market players but not the public struck some as a feint. "I don't see why they couldn't do both," said Josh Brown, a vice president at Fusion Analytics and market commentator.
Howard Lindzon, the CEO of social media investing site StockTwits and the manager of several small funds, said Greifeld's explanation left him unconvinced.
"I think the market is so complex and the machinery is so complex and ... I don't think there's anything you can do any more. It's so botched," Lindzon said. He added: "They can't be shamed into fixing the system."
Greifeld made oblique references to an external problem that may have shaken Nasdaq's system and forced the exchange to engage in "defensive driving", but he did not elaborate.
"I think where we have to get better is what I call defensive driving," Greifeld said. "Defensive driving means what do you do when another part of the ecosystem, another player, has some bad event that triggers something in your system?"
Some could not square Greifeld's explanation of the internal Nasdaq software glitch with his references to "another player," which he noted again later: "We spend a lot of time and effort where other things happen outside our control and how we respond to it. This is an example of that."
Brown, of Fusion Analytics, said Greifeld's actions counted more than his tone.
"I thought they did a better job fixing the problem than communicating about it," Brown said, noting that trading resumed without incident. "The first thing they did was halt trading so that we didn't have one of those Facebook fiascos. They probably averted chaos. I thought they actually handled things really well, it's just that they were really bad about getting out front."
Michael Driscoll, a former Bear Stearns trader who now teaches at Adelphi University, said he doubted Greifeld could have said anything that would have comforted investors.
"It was a slow thursday in August when there was not much going on," Driscoll said. "I'm not sure they could have handled it. It was three hours. What's the difference?"
Driscoll, Brown and Lindzon all chalked up the computer errors to the price of doing business in the modern world.
"It's going to happen again," Driscoll said. "It's the nature of computers.
The Securities and Exchange Commission said it was monitoring the situation. Reported by guardian.co.uk 2 hours ago.