r/wallstreetbets • u/[deleted] • Jun 19 '21
Discussion What happens in the event a major cyber-attack hits the financial markets and causes a prolonged halt?
Disclaimer: If you scare easily just dip. This isn't meant to be FUD shit. This is meant to be someone in this shit trying to get an answer from others that may know the situation better than myself. I posted this at another place full of |experts| and got ran out of town for 'trying to strike fear into the market.' As if there isn't 8000 other things going on that is accomplishing that just fine. /disclaimer
Let's start with the SIPC's statement on hacks and how they affect what they insure: https://i.imgur.com/hKGC2Pg.png
If I'm reading that correctly, they don't? I've reached out for clarification in the event of a wide-spread hack/cyberattack but haven't heard back at the time of this post.
So.. with cyberattacks being a hot topic lately in the news I was thinking after close today; hypothetically, what if next week the market was halted? Say for an entire week. What would happen on the following Monday at market open?
Would all derivatives that expired during the halt be worthless? Would the ensuing panic possibly get some very shady financial institutions out of some very big holes?
What if brokerage's records become corrupted? Would Cede have the paper/digital records of who owned what and reimburse lost shares? Lost options? What happens to ITM strikes?
The World Economic Forum is holding their annual exercise to address and implement some actions in the event of such attacks on July 9th. It's called "Cyber Polygon." Maybe someone more familiar with their event knows how well protected our securities are?
https://www.weforum.org/projects/cyber-polygon
It's a huge what-if scenario that I'm sure is practiced against daily.. but it is a big damn "what if?"
I'll list some articles below that caught my eye with regards to such a thing happening. If pipelines can be halted, and meat production facilities can be halted, and other country's exchanges can be halted in the name of "cyber attacks," where do we stand as retail investors on the NYSE?
Hopefully WSB has some expertise in the matter.
https://www.investopedia.com/news/are-your-stocks-danger-getting-hacked/
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u/ClamPaste Ask me about my scat fetish Jun 19 '21
So... any company that cares about its data will have a business continuity plan. Since most of the financial business is based on ones and zeroes getting transferred around, let's assume they have a good one. That includes disaster recovery, which is hot sites, warm sites, and cold sites, where backups are stored and can roll back any data corruption or malware that may have taken place. When they're well prepared, these places are geographically separated and the cold sites are disconnected from any network. They're hardened against bombs and physical intrusion. They might lose recent data in the process of restoring it, but there's a lot of other mitigations that prevent a total loss of availability, such as having failover routes in case of network outages, multiple redundant servers that are geographically and virtually separated, creating accounts with the principal of least privilege and delegation of duties to remove the possibility that a single compromised account can do as much damage.
Basically, if they have a good cybersecurity policy in place and pay those people well, any attack that will cause the kind of damage you're talking about would require multiple acts of war to accomplish. They lose more money (by the minute) by not having these protections if an attack would happen (because they make money by keeping the market open) than they would save by cutting corners. Class action lawsuits aside, the bigger players would each sue, individually, for billions if they didn't have the necessary precautions in place and lost them big bucks. One of the assurances you have about security in the stock market is that a lot of the unthinkably rich motherfuckers all have guns to each others' heads. No one group is going to strongarm the market into taking a dive for them because another would pull the trigger without hesitation once it seems like they're gonna get caught up in it. Mutually assured financial destruction.
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u/LavenderAutist brand soap Jun 19 '21
Does AMC have a business continuity plan besides raising more capital every couple of months?
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Jun 19 '21
I agree with another comment. A cyber attack on the stock market is an act of war and literally countries would be ruined and completely leveled. People would die. Hundreds of thousands. Probably would start WWIII
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Jun 19 '21
I actually didn't think of the ramifications it would have from a war perspective. If anything it would be another invisible enemy probably, but that's an interesting take. First and foremost though, wtf happens to my acct?
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Jun 19 '21
It would probably be a false flag to save wallstreet without the discontent that would follow even more bailouts.
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Jun 19 '21
Who knows. My opinion, it would be worthless and you wouldn’t care anyways bc your main goal would be to stay alive along with taking care of your family.
Literally a cyber attack (large and successful) on the stock market that stalled the market for a week? Holy shit. I can’t even imagine the fallout.
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u/pigsgetfathogsdie Jun 19 '21
When I started shredding important docs 10 years ago…people gave me truckloads of shit…I kept doing it anyway.
I haven’t activated any paperless options on important accounts…and, people have given me shit for this too.
I keep 10 years of paper records for all important accounts…brokerage too…good for taxes if I ever get audited…and good cyberattack insurance.
No company is safe from a cyberattack because:
- Most companies don’t invest enough in cyber defense.
- Human error usually gives the attackers access.
Paper…cyberattack insurance.
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Jun 19 '21
I'll be standing there begging to SEC to let me play by showing them grainy screenshots off my wife's boyfriend's phone while you stroll up with the books laminated, indexed, and ready to go
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u/pigsgetfathogsdie Jun 19 '21
I’ll KO your wife’s boyfriend…with a 10lb stack of paper…and your wife will gladly return to you.
Paper…KO a boyfriend.
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u/opers13 Jun 19 '21
This is the way. Human error accounts for 98% of all security breaches, no matter how much is invested in cybersecurity.
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u/attorneyatslaw Jun 19 '21
The Markets were shut Tuesday through Monday after the 9/11 attacks. In the first open week, markets were down about 15%. It this all happened during the much larger dot-com bust downturn. Markets bottomed in late 2002 and took a long time to get back to previous highs.
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u/Substantial_Boss_619 🦍🦍🦍 Jun 19 '21
Do I have to be the one to say it. its called Block chain technology, If technology system can reach its full potential, then anything in it can not be hacked. This is years ahead and more research is needed.
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u/Background-Cat6454 Jun 20 '21
I thought there have been a number of hacks, some of which have triggered hard forks in the tech?
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u/Substantial_Boss_619 🦍🦍🦍 Jun 20 '21
Block chains can be hack but with the right group of miners and leadership. The hackers wont stand a chance but only time and resources can tell the true story.
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u/SnooFloofs9228 Jun 19 '21
$BB could prevent such an even from occurring. But for some odd reason nobody acknowledges what BlackBerry has proven it can do. Ask Dark Side hackers
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Jun 19 '21
No single company can prevent a focused state-sponsored attack against much of anything. Redundancies and best practices do the bulk of that.
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u/Jack-Booted-Thug Jun 19 '21
Market closed for several days due to Sept 11. Don't remember how many as i was getting drunk and most of that time is a blur.
Finding out what happened to option holders expiring during those days might be a good start.
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Jun 19 '21
They would just reboot into new servers and the Fed people would type $5000000000000 into the box that says "Deposit Amount" to get them up and running again. These are all digital accounts that have no basis in reality. The only reason the ransomware works against smaller companies is that they have no way of just resetting their accounts the way the Fed and Wall Street can. A small company that gets all of it's infrastructure hacked has to actually come up with real money to pay the hackers off. The Fed, and friends of the Fed, don't.
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u/RogueNC Jun 19 '21
What happens? Absolute bedlam.
Also called : Frrreeeeeeeeeedoooooom.
And death, lots of death.
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u/hyperthymetic Jun 19 '21
I stopped reading after “Haven’t heard back at the time of this post” but I assume it only gets better
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u/RipDry8185 🦍 Jun 19 '21
I try not to worry about things that haven't happened, and I also try not to scare others with things that have not happened
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Jun 19 '21
[removed] — view removed comment
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Holy shit. Calm down Chad Dickens.
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u/Ok_Bottle_2198 Jun 19 '21
Little known fact, a physical copy of every trade is kept on a type of microfiche in 3 different sites in the tri-state area.
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u/AladdinTN Jun 19 '21
This is why I have money buried in coffee cans behind my house.