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Legal View with Ashleigh Banfield

Computer Glitches Hit New York Stock Exchange, United Airlines and Wall Street Journal; NYSE Trading Has Been Halted For An Hour; Airline Official: United Air Glitch Not Connected To NYSE One; White House Official Says Obama Has Been Briefed On NYSE Glitch. Aired 12:30-1p

Aired July 08, 2015 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[12:30:02] ASHLEIGH BANFIELD, CNN HOST: And again, a computer glitch, the reason for that ground stoppage.

And then if you can see on your screen, the New York Stock Exchange and United were joined by the Wall Street Journal as well. Anyone trying to log on to wallstreetjournal.com was met by a very strange white page with a big error message saying "Oops" on it.

In the last few moments ago that has somewhat resolved. Some people will be able to access parts of the Wall Street Journal, certain stories on the Wall Street Journal. But I'm not sure that that is completely resolved at this point.

Anyway, there is a massive fallout when a major stock exchange like the New York Stock Exchange can't move for now. Effectively one hour.

Our Business Correspondent Alison Kosik is standing by live right now. She joins me at the NYSE.

I know you've been talking to your sources. Do we have any more information on what's happened there?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It's funny you asked that. I was talking with some traders. And they said we're sitting here in the middle of an information vacuum waiting from the NYSE to hear what is going to be the next step.

But we did get some indication that all was not well even before the opening bell today.

The New York Stock Exchange gave out a or e-mailed, you know, an e- mail to all of the traders here at the stock exchange with it, 220 stocks that I've got in my hand where the stock exchange was saying that there were problems with these stocks. They didn't say what. But traders knew that you couldn't sell or buy these 220 stocks.

All went well at the opening bell. And then suddenly you had a technical glitch that concentrating.

I just want to make it clear, though. The New York Stock Exchange systems are down. But New York listed stocks are still being traded on other exchanges. Like the NASDAQ and something called Arca, that's an all electronic exchange.

So trading is still going on for New York listed stocks, you're just not seeing business going out of the New York Stock Exchange. Meaning traders, who were by the way, a lot of the trading or 82 percent of the trading done here at the New York Stock Exchange is electronic. And they run around with these little hand-held devices. They cannot make any trades coming or going on those handhelds from this building for sure. Ashleigh?

BANFIELD: And you toggle often, Alison between stocks and the time of day. And the time of day right now is 12:32 Eastern Time which marks the official one-hour point since the NYSE halted its trading.

Thank you for that and do let us know when you're able to speak to your sources again to find out any other details if you can.

In the meantime, I want to go national on this because when these things happen and they seem terribly coincidental at this time, but one can never be certain and the government takes notice as does the Department of Homeland Security.

And that's why our Jim Sciutto, CNN's Chief National Security Correspondent, joins me now to talk a little bit about the reaction from the department.

What more are they saying now, Jim?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well right now they're saying, I've spoken to a DHS official who says there are no signs of malicious activity at this time regarding the attack on the New York Stock Exchange and similarly with United Airline.

Just in terms of context, however, you make the point.

One thing we know is that U.S. firms, U.S. government institutions are under a constant state of cyber attack. The leading culprits tend to be China, Russia, as well as hackers in those countries that that sometimes affiliated with the government and sometimes not.

There are other countries as well who do cyber attacks on U.S. firms France, Americans don't know about but in terms of a business context as supposed to a National Security context, a lot of hacks and cyber attacks come from France even.

So that when you have a confluence of attacks like this on NYSE on United, Wall Street Journal, you have to step back and ask that question. And that's why I call DHS immediately but their answer was straightforward and simple no signs of malicious activity at this time.

But listen, you know, these are things that develop over time and that could change both back their current status as they don't see a cyber attack is behind us.

BANFIELD: Well and also as we continue to hear from the various organizations and certainly United telling our Rene Marsh that this is truly a router issue that this necessarily wasn't anything other than something that was local to United Airlines.

Still let us know, Jim, if there's any update to that story. We do appreciate that.

I just want to also read to you again, if you're just joining us, the New York Stock Exchange being halted over an hour now. And the exchange very quick to put out some information on this, whatever they could put out and we have this attributable to a spokesperson for the New York Stock Exchange.

"We're currently experiencing a technical issue that we're working to resolve as quickly as possible. We will be providing further updates as soon as we can. And are doing our utmost to produce a swift resolution, communicate thoroughly and transparently and ensure a timely and orderly market reopen."

[12:35:03] All of this as United Air had grounded 4,900 of its flights because of a computer glitch as well. But suggesting that this was really a router issue, we don't necessarily know what the New York Stock Exchange issue is at this time. And we're still waiting on the Wall Street Journal for a statement as to what they think may have gone wrong.

They're partially up and running at this point and much of their material is accessible at wallstreetjournal.com.

But joining me now live on the phone is a Rob Lee, who is a Digital Forensic and Incident Response Director at the Science Institute, he is on Austin Texas.

Can I get your reaction to this just talk of that?

ROBERT LEE, DIGITAL FORENSIC INVESTIGATION: Hi, Ashleigh.

Honestly, this is not have any indication that this is anything related to any malicious or hacker type of activity.

Rather technical glitches, the type of down time that sometimes comes from this is could be phenomenal, I mean since that kind of recover from it.

If it was a hacker attack, that more likely or not, that is in to this United New York Stock Exchange would be probably more silent at this point and not give any indications that it's a technical glitch versus still they're still trying to collect information during the initial stages of -- in our base hacker attack.

BANFIELD: And just quickly, you know, obviously the Department of Homeland Security saying that there's no sign of malicious activity at this time. But, I mean all happening within the same two-hour period.

Does it give you pause even though United has said this is a routing issue, we're not clear what NYSE is at this time. And we don't know what the Wall Street Journal. We'll say, although they're back up and running. Does it give you pause this could have been something considered a dry run, which is what some people are always concerned about, that they'll be testing before anything more major potentially.

LEE: Well, that's a very good point. But this is not follow this typical patterns of even the type of attacks that you generally see from China, Russia, and other countries that would potentially want to do this.

Those countries and entities out there and trying to do hacker type attacks are usually trying to do it for monetary gain or intellectual property gain.

The question that you would have to -- he then ask if there's was an attack by one of these organizations or entities, criminal organizations is are -- what is going to be gained by that attacker taking these down -- put these sites down.

But it could be a dry run. Does it give me a lot pause? At this point no because of the statements from entities in how strong fully worded they are that these are technical glitches and that DHS was immediately coming out saying that there's no signs of hacker activity.

If it was, you would probably see a lot more silence as they're trying to figure out exactly how the word, their messaging, if it was an internet-based attack they were currently dealing with.

BANFIELD: All right Rob, thank you so much for that I appreciate it. You know I introduced Rob just by giving the last statement that the New York Stock Exchange had put out, saying we'll give you the information just as soon as we can but that was an outdated statement already.

So let me go through a few more releases now from the NYSE. The NYSE is now saying the outage is not the result from a cyber breach and here's what they're twitting out. "The issue we are experiencing is an internal technical issue and is not the result of a cyber breach. We chose to suspend trading on the NYSE to avoid problems arising from our technical issue.

The NYSE-listed securities continue to trade unaffected on other market centers which is why you see numbers still moving. Some those of stocks trading on other platforms and certainly other platforms, not affected as well.

For instance the NASDAQ is not frozen, everything as business as usual according to the NASDAQ et cetera as well.

We've got a lot more to come. And including just what kind of an impact this could have right around the world and for you if you hold any stocks, if you have a 401(k). We're at an hour plus now with absolute frozen zone.

Does that make a difference to you?

Back right after this.

(COMMERCIAL BREAK)

[12:42:55] BANFIELD: Welcome back breaking news here at CNN. I'm Ashleigh Banfield.

I want to welcome our viewers here in the United States and around the world.

Major glitch, you might say, on the New York Stock Exchange, for over one hour halted trading. Numbers have barely moved because of some kind of computer glitch at the exchange.

They say they're working to fix the problem. But ultimately it came at a time when there were two other major glitches affecting other major organizations in America.

United Airlines downing thousands of its planes a ground stop effectively because of computer problems. Actual boarding passes being written out by hand.

Delta or rather United now saying that that was a routing problem and that was it was individual to that airline and at the same time the Wall Street Journal also closing down. No one able to get on to the website a big error message greeting people and while that was brief, there's still no explanation from the Wall Street Journal as to what kind of computer glitch took down their website.

Wall Street Journal now effectively back up and running but you can see on your screen right now the problems persist for the New York Stock Exchange.

In fact, the New York Stock Exchange just sending out a few more twits to update their situation saying it is an internal technical issue and not the result of a cyber breach. Of course this being what many people were concerned about. Coincidence?

Three major organizations all with the same kind of problem, all within the same few hours, each coming out to identify as much as they can what the problems were in each of these circumstances.

The FBI for its part also weighing in on this and let me read to you what the FBI has now sent out in a statement regarding the New York Stock Exchange.

"We've reached out to the NYSE and offered our assistance. They have said it's a technical glitch. No further law enforcement action is needed at this time. The FBI will continue to monitor the situation."

[12:45:01] For its part, the Wall Street Journal only saying in a statement that the wallstreetjournal.com is having technical difficulties, the full site will return shortly.

I want to bring in some of our guest who know a thing or two about what happens when these kinds of very strange happenings go on. Not to suggest that anybody has any answers. Rona Foroohar is CNN Global Economic Analyst. Paul La Monica is CNN Money Correspondent and our Maggie Lake is the CNN International Business Correspondent.

Paul, I just want to start with you with the Wall Street Journal. Did you say that you were just as we were coming on air able to access the site but in a different way?

PAUL LA MONICA, CNNMONEY CORRESPONDENT: The home page appears to be available now if you type that in or if you have it bookmarked on your phone or other mobile device. You get the WSJ site but it's redirecting you to a different URL and the message is still up saying the site is having technical difficulties.

And so the whole home page is there. But it's not completely up to its 100 percent like the way you would normally see it if they weren't having any glitches.

BANFIELD: And Maggie, important to note that while the New York Stock Exchange is now going on about an hour and 15 minutes frozen, there is still trading going on elsewhere. In fact, the NASDAQ was put out a statement saying, we're fine, everything -- in fact, they're up to that.

MAGGIE LAKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT: They are. And those NYSE-listed stocks are trading elsewhere, not only on the NASDAQ but also on other electronic platforms that retail investors don't use but other institutional big banks and brokerages who trade use those.

So, there is trade going on. It's not that all trade in the U.S. is halted but the New York Stock Exchange, a very critical component.

And I'll tell you, Ashleigh. They say it's an internal technical problem. It's taking them a long time to get to the bottom of it. So clearly, they may not know exactly what it is that happened or in this complicated systems. It's taking them a long time to sort of system test.

What they don't want to do is reopen and have a problem again and have to shut down again because this is really going to go to the core of confidence that Paul brought up earlier.

Investors have been through a lot, the financial crisis, the flash crash. They're very nervous. They don't have that sort of full faith in market function, I think, that they used to.

So when something like this happens, officials are very aware of that so they don't want to have a false open. They need to test the entire system with all of the participants first before they reopen.

So I have a feeling even if they've identified it, that's why it's taking so long. They want to make sure they have all the boxes checked before they open for trading.

BANFIELD: And Rona, I'm going to ask you something in a moment just about, you know, investor confidence and trust and how the pros may differ from the Ashleigh Banfield who bit were who don't feel quite as confident.

But if you can hold that up for a moment, I want to go to Rene Marsh right a way.

We're juggling these three stories, not only the New York Stock Exchange and the reverberations from that freezing that's now over an hour and 15 minutes long. But also the Wall Street Journal, its website going down due to likely a computer glitch. And we should also mention that it is back up as Paul La Monica just reported to us. There's redirects and the full site now available for the Wall Street Journal, no comments yet, though, publicly from the Wall Street Journal.

So we're awaiting that as well and I'll get those to you just as soon as they come to us. But with regard to United Airlines, our Aviation Correspondent Rene Marsh is live in Washington, D.C.

I mean 49, if I got the number right, I know I had it in front of me in a sea of papers but about 4,900 flights were grounded, Rene. And there -- the last report you had for us was that they were saying this was some sort of a router issue? What more are you learning?

RENE MARSH, CNN AVIATION CORRESPONDENT: Well, we are learning that this worldwide problem to United Airlines operations according to a source, essentially, their teams have investigated this and they have determined it was not the work of hackers. There was no hacking or cyber attack involved in this situation whatsoever. That is the determination that has been made by teams investigating the source of the problem.

They are saying that this is solely an issue regarding this router that affected how the computers were communicating with other computers. And as it relates to whether their computer problem was connected to the New York Stock Exchange.

I'm told by the source, there's no evidence that there's any connection between what happened with United Airlines and what we see currently happening with the New York Stock Exchange.

So getting a little bit more of clarity as far as what was behind that very widespread issue. But, of course, as you know, Ashleigh, the damage is already done, lots of delays, lots of people still struggling to get to their destination as we speak.

BANFIELD: Yeah, you can't ground 5,000 flights roughly without having a really bad day right across the country and around the world as well because a lot of those flights may have had international connections as well.

Rene Marsh, stand by if you will. I want to hopscotch right from you over to the White House, still in D.C. where Jim Acosta is standing by.

You know, Jim, I talked to Jim Sciutto, our colleague earlier who had reaction from the Department of Homeland Security. And are we getting reaction as has the White House now with regard to these three major developing stories?

[12:50:04] JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: A little bit, Ashleigh. A White House official says that the President has been briefed on this situation.

They say that the Treasury Department and White House officials are monitoring what's happening at the New York Stock Exchange but they say for further questions, they're referring us to the stock exchange and the Securities and Exchange Commission.

I will say, though, that, you know, coming up at the top of the hour, Ashleigh, we'll going to get a briefing here at the White House and the White House Press Secretary Josh Earnest, he is likely to be peppered with all sorts of questions because of the very strange nature of all of these glitches that we've seen this morning. Not only the New York Stock Exchange but what happened over at the United Airlines and even at the Wall Street Journal. And they are very mindful of the cyber threat that exists right now in this day and age particularly over here at the White House.

They've had cyber attacks here on the White House. And so, this is something that we're monitoring closely and we'll be looking for more developments, more information as the day goes on.

But at this point, they appear to be not very alarmed at this point and relying on what the stock exchange, United Airlines and the Department of Homeland Security that there's nothing malicious going on here. And that these are all individual glitches that these three very important entities are dealing with right now.

But at the moment, the president is just being briefed on this and they're watching the situation closely, Ashleigh.

BANFIELD: That's going to be a great press briefing. I'm going to watch that.

ACOSTA: I think so, absolutely, yes. I'll be there.

BANFIELD: I think you will be. Get your mic all tapped up and ready to go.

Jim Acosta live for us on the North Lawn. Thank you for that.

After the break, so what happens when everything goes back to normal? What happens when the NYSE opens up the spigots again and trading resumes? Exactly, how is that going to work and which way are those numbers going to go? We'll talk about that after the break.

(COMMERCIAL BREAK)

[12:55:18] BANFIELD: Breaking news everyone. Welcome back, this is CNN's live and breaking coverage of three major computer glitches.

The New York Stock Exchange, also United Airlines, and the Wall Street Journal, all effectively -- massively affected by what they're saying are computer glitches. The worst of them perhaps, still a big problem and that is the New York Stock Exchange. Trading has halted for almost an hour and a half now.

So clearly, we're watching to see what the White House is going to have to say about this. There's a briefing coming up in just a few moments. And we're keeping a live eye on the press briefing room and you're going to be in their just as soon as that gets active in that room as well.

In the mean time, a lot of questions still need to be answered and that is, what happens when it starts trading again? I mean, exactly, what's going to happen?

Rana Foroohar, when this begetter open and trading happens, is it going to be business as usual or will this have a massive affect on people's trust and...

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: You know, I think that you're going to see a correction. Usually, when things like this happened, the markets come back open. There's a, there's a dip. But I think that what's going to happen very quickly after that, people are going to go back to wearing about what they were before this all thing happen which was China and Europe and what the feds going to do in September.

Volatility in the first half of this year has been more than all of last year. So markets are really on a hair trigger already before any of this happened.

BANFIELD: So Maggie, there's a difference between the pros who as Alison Kosik so affectively noted, we're down on the floor the stock exchange, just pulling their heels and playing video games during this, round.

MAGGIE LAKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT: Chilling, They're chilling.

BANFIELD: Yeah, they're not at least that worried. And me who's very worried about my 401(k), who's very worried about the effects of Greece and all the other European Union countries that might be taking hues from Greece. And we're all very concerned about something like things.

Is that going to be the difference? I mean, will the average investor have a huge impact after this kind a stoppage?

LAKE: Hopefully not. Because what they should do is just sit back and let the professionals do it because this is not a time to trade on fear or emotion because you're going to get dragged to whatever volatility or bumps happen when they reopen. These professionals have been through a lot of this, they have seen it, they know what to do and they will have much cooler heads.

If you're watching this and you're at home, you don't want to jump the second hour this opened and get involved and do anything. Don't worry about your 401 for today. You know, we always say, be diversified, have a long term perspective, that's exactly what you want to do. You don't want to do anything based on this...

MONICA: Don't even look at it that's right.

LAKE: That's right, that's exactly right.

BANFIELD: Except for quarterly, right?

LAKE: Yeah. You want to be -- just not on this particular kind of day because it's just going to be too hard to engage. And remember, when you push that button, it doesn't automatically happen, you need things to settle first.

The NYC just state, if you were trading and you're at home this morning. That -- earlier, it said all open orders will be canceled. So they're going to communicate, they're going to work it out, they're going to tell how this is going to go if you had a trade pending. If you don't, just stay out let this pass.

MONICA: U.S. stock still a great place to be, by the way. U.S. blue chips...

BANFIELD: Oh really, because I think the mattress is great place, call me crazy.

MONICA: And you think of -- to a point, right. And you think to what U.S. blue chips, they have had such a phenomenal run since the great recession. If you sat that out...

BANFEILD: Yeah.

LAKE: ...you'd really be missing these huge hints. People are going to still buy Iphones, they're going to go Starbucks, they're going to buy shoes from Nike. These are companies that, yeah.

BANLFIELD: Not suggesting for a moment that thinking of sitting things out. Not suggesting for a moment that the SSC is sitting this out. But haven't heard boo from the SCC, is that unusual?

MONICA: Unfortunately, the SSC is typically a lot slower to react. And this isn't necessarily to say that they're not doing anything, that I would have think that they are in constant contact with the New York Stock Exchange about what is going on right now. But they haven't said anything publicly, at least the CNN at this point, but they're going to have to.

BANFIELD: Or maybe they like the statement from the FBI saying, we're good, we've called, they don't need us, we're fine.

MONICA: You know, the SSC also, they've been hit by budget cuts for the past few years and that is a big problem. It's easy to pick on the SCC, but I don't envy Mary Jo White at all.

BANFIELD: Yeah, OK.

MONICA: She's got a tough job.

BANFIELD: I'm going to leave it there because we are again awaiting this live news conference. You can see the small box in the bottom right hand side of your screen. This will be a lively press conference from the pressroom at the White House. And we will have all of our top people on it for you.

Thanks so much for riding this fun out with us. We'll continue to watch the story here on CNN. I'm going to make way now for Dana Bash. She's going to take over. She's got Wolf show handled from here.