­­­­­­Exchange crash may be sabotage

Steve Dinneen
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A WORKER at the London Stock Exchange is being investigated over allegations he deliberately sabotaged its Turquoise trading platform.

The high frequency trading platform crashed during early morning trading yesterday and was offline for two hours. The exchange released a statement saying the incident was caused by human error that “may have occurred in suspicious circumstances.”

City A.M. has learned the crash may have been timed to coincide with an announcement by the LSE, planned for later that morning, confirming the date it would transfer its main exchange to a new Millennium IT software platform.

Turquoise made the switch to Millennium software last month and the main exchange had completed its third “dress rehearsal” for the switch last weekend. The LSE has now been forced to postpone the transfer until the new year.

The problem is believed to have locked customers out of the network but not affected the platform itself. According to the release a small number of executions that took place will be “busted”. A spokesman said: “A virus is one theory but it is too early to say.”

An internal investigation is now focusing on an individual suspect to discover who is behind the crash. A Financial Services Authority probe has also been launched. It is not yet clear what the motive for an attack could be.

A source close to the exchange told City A.M.: “There is a person being investigated. There was an announcement about the platform change planned later the same day.

“It looks like someone may have been trying to undermine this.”

He added: “There is no problem with the IT system. It is working just fine.”

A second source said: “This is a highly competitive market and the stakes are very high. Exchanges move very quickly and everyone is trying to muscle into the space.”

The LSE bought Sri Lanka-based Millennium in a bid to upgrade the bourse’s system to compete with super-fast transfers offered by rivals including Bats Europe and Chi-X Europe.

However, Turquoise was forced to close for an hour a day after launching on the Millennium software following a problem with a network card. The platform was created with backing by banks including Citi, Goldman Sachs, Credit Suisse, UBS and Merrill Lynch before being bought by the LSE.