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6/2/2005
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NYSE Trading Halt Triggered by 'Network Storm'

Primary and backup network routers overwhelmed by duplicated error message.

An error message that was duplicated millions of times overwhelmed network routers at the New York Stock Exchange Wednesday, leading to a four-minute halt in trading just before the closing bell.

Trading resumed normally at 9:30 a.m. Thursday.

In a statement, the NYSE blamed the system failure, which suspended trading at 3:56 p.m., on a communication problem. In an interview Thursday with cable-news channel CNBC, NYSE CEO John Thain said the problem was caused by a "network storm" in which "an error message was created and then duplicated millions of times," overwhelming both the system's primary and backup network routers.

The last major trading interruption at the NYSE occurred on June 8, 2001, when trading was stopped for about 90 minutes due to a "computer connectivity" problem, a NYSE spokesman says.

In 2003, the Securities Industry Automation Corp., which provides the NYSE's trading infrastructure, implemented Secure Financial Transaction Infrastructure, which was intended to improve the resilience of the financial industry's data communications capabilities. A letter posted on SIAC's Web site dated Nov. 24, 2003, says "SFTI possesses no single point of failure and is more resistant to man-made and natural disasters." The NYSE spokesman declined to comment.

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