You can be on Entrepreneur’s cover!

Wall Street to Nasdaq: What's Your Problem? Nasdaq's three-hour outage on Thursday has fanned concerns about the exchange's record of computer glitches.

By Matt Hunter

entrepreneur daily

This story originally appeared on CNBC

thewallstreetexperience.com

After the Nasdaq exchange shut down trading for an unprecedented three hours Thursday, many voices on Wall Street were wondering: Why can't Nasdaq get its act together?

Reuters reported that 30 minutes into the crippling outage that hobbled the Nasdaq stock market on Thursday afternoon, exchange officials already had the problem fixed. But amid caution, it took another two-and-a-half hours before it was ready to turn the all-electronic market back on.

Former U.S. Securities and Exchange Commission Chariman Harvey Pitt told CNBC that the Nasdaq's performance was "inexcusable."

"Nasdaq has, in my view, serious issues and there are two particular problems here. The first is, is there technology up to the task. That's number one and then the second is, that when technology goes bad, do they have an established crisis management program?" he said.

"I think the problem is requiring the use of technology to be continuously tested and updated. Testing will start to reveal problems. It won't catch all of them, but it is required now to have a continuous stream of testing and not once every quarter or once every half year," Pitt said.

At the close of trading, the Nasdaq still hadn't explained what happened.

"It seems as if computer glitches are happening with more frequency and it may be due to human error on the programing side. At the end of the day we have to decide if we are comfortable with the risk that these glitches can close markets.," said Marc Lasry at Avenue Capital

Dennis Gartman, author of The Gartman Letter and a frequent CNBC contributor called the outage an "embarrassment."

"This is such an embarrassment to the entire financial community. To have the Nasdaq go down as it has; to be down three hours--it's one thing to be down for five minutes--to be down for three hours is absolutely inexcusable," he said.

Another investor told CNBC: "This is a lot less serious on a Thursday afternoon in August than it would be at some other time. It will affect people who really need liquidity and were planning to get it from Nasdaq stocks. These things happen nowadays, markets break down, it's an assumed risk of trading that the market you need to trade in could break down."

Contributor for CNBC

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

This Highly-Debated Piece of Cinematic History Just Sold For Over $700,000 at Auction

The wood panel from "Titanic" is often mistaken as a door. Either way, he couldn't have fit. (Sorry.)

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

From Tom Brady to Kevin O'Leary – See Who Lost Big in the Wake of the FTX Crypto Collapse

The crash exposed an $8 billion hole in FTX's accounts, leaving investors and customers scrambling to recoup their funds.

Fundraising

Avoid These 9 Pitch Deck Mistakes When Asking Others For Money

Crafting an efficient pitch deck requires serious effort, but at least it's not wandering in the dark since certain rules are shaped by decades of relationships between startups and investors.