Trading halt highlights Nasdaq’s lack of communication in technological failures- asset managers

August 31
7:46 AM 2013

Asset managers and brokers questioned whether the communication efforts undertaken by Nasdaq was enough to keep the investing public informed in times of technological crisis. Last week, the exchange was hit by an unexplained "connectivity issue" that halted trading for three hours. Well-known technology companies like Google, Facebook and Apple trade on the Nasdaq together with more than 3,000 other stocks.

Nasdaq Chief Executive Officer Robert Greifeld told CNBC that the exchange kept in touch with regulatory bodies, the Securities Industry and Financial Markets Association and the organization that represented asset managers and brokers.

However, some stakeholders question the sufficiency of Nasdaq's efforts. Principal Financial Group Inc President Jim McCaughan said, "Greifeld obviously was trying very hard to get this right and to communicate appropriately a difficult situation. But I think he's mistaken to think by talking to the inside circle he's communicating enough."

Wedbush Equity Management Managing Director Stephen Massocca agreed. "It seems like there is little consistency in how these things are dealt with. I don't think there is a single methodology for dealing with these things, that quite frankly are going to continue to happen," he added.

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