The Kingdom must take precautions to ensure more online protection to its financial institutions, key industry executives and investment experts said yesterday.
A false report of explosions at the US White House that wiped out around $ 136 billion from the Standard & Poor’s 500 Index in about two minutes highlighted the risks of the computerized trading that dominates the $ 18 trillion market.
The index recovered from the plunge within three minutes as the news service said its Twitter account had been hacked and there were no explosions. The S&P 500 ended the session up 1 percent at 1,578.78.
Industry watchers said the fake tweet was retweeted nearly 2,000 times before it was taken down.
“We all need to be more careful on Twitter in regard to what is true and what is not. We all should be more skeptical,” said a Riyadh-based social media activist.
“Thanks that the local Saudi market was not affected, which is evident from the Tadawul index,” said S. M. I. Hassan, chief of the market management at Allianz Saudi Fransi. “The Saudi and Gulf stocks were not affected,” said Hassan.
According to recent statistics, Saudi nationals form the fastest growing group on Twitter.
There has been an unprecedented rise in Twitter users across the Middle East in general, but Saudi Arabia ranks first, said Twitter CEO Dick Costolo, in a report recently. “Twitter is seeing some of its most torrid growth in the Middle East including Saudi Arabia,” said Costolo.
“In view of such a massive growth, the Kingdom must take precautions to ensure more online protection to its financial institutions and to its social life,” said Priyan Attygalle, CEO of the American Express Saudi Arabia.
He, however, said investors and Twitter account holders received a prime lesson yesterday: What happens when two powerful forces smash together — social media and algorithmic trading.
The false AP tweet about two explosions at the White House saw the Dow Jones briefly plunge 143 points.
Following the fake tweet, White House Press Secretary Jay Carney told reporters “the president is fine.” An outfit calling itself the Syrian Electronic Army claimed responsibility for hacking AP’s main feed and putting out the bogus story. The incident illustrates the inherent and perhaps poorly understood risks represented by the combination of electronic trading and social media.
The fake tweet was re-tweeted nearly 2,000 times before it was taken down. Coming from a trusted source like AP, the news slammed the stock market instantly. Muallim A. Otaibi, an IT expert, called on companies and individuals to take all precautions to prevent hacking. “The steps taken to protect your Twitter account are much the same steps you should take to protect your other online accounts,” he said.
He advised account holders to create strong passwords and keep a watch on odd e-mails. According to a report from AP itself, attacks on two of its Twitter accounts came after suspicious “phishing” e-mails were sent to its employees. Twitter, unlike its social network peers at Facebook and Google, does not currently offer users the option to turn on two-factor authentication — an extra layer of protection for their accounts.
The misuse of Twitter as a networking service was also recently criticized by Saudi government agencies. Maj. Gen. Mansour Al-Turki, spokesman of the Ministry of Interior, told a news conference on March 8: “There are people who misuse the social networking sites and try to send false information and false evaluation of the situation in the Kingdom and the way policemen in the country are dealing with situations.”
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