LSE trading pool crash due to 'human error'

A Linux-based trading platform at the London Stock Exchange was knocked offline for two hours on Tuesday due to human error, in what may have been suspicious circumstances, the stock exchange said on Tuesday.

The trading platform — named Turquoise — has been running on a new Linux-based system for the past two weeks. It was rendered inaccessible to market members for two hours on Tuesday, between 8:23am and 10:30am, the London Stock Exchange Group (LSEG) said in a statement.

Turquoise is a pan-European trading platform based in London. It has a 'dark pool' trading component that allows members to "place large orders for trades which are not made known to the market until after the trade has been executed", a spokesman for the London Stock Exchange told ZDNet UK on Wednesday.

"The problem occurred on the network, so members could not access the [Turquoise] technology," the spokesman said, though he stressed that "the [Turquoise] technology itself is fine and continued to function correctly".

In its statement, the LSEG said that "preliminary investigations indicate that this human error may have occurred in suspicious circumstances".

At the time of writing, the LSEG could not deny that the downtime had occurred because of a hack on its IT systems. "I think it's too early to be specific about what the cause was... whether it actually is suspicious or not, we are investigating that at the moment," the spokesman told ZDNet UK.

"If the investigating authorities do find that the Turquoise trading platform was hit by sabotage, that would raise some very serious and fundamental questions about the state of internet security at the London Stock Exchange," said Mark Darvill, vice president at security firm AEP Networks, on Wednesday.

Due in part to the Turquoise crash, the LSEG has postponed the migration of the main London Stock Exchange equities market to the Linux-based system used by Turquoise until 2011. The main market migration will be rescheduled for "a date as early and practicably as possible in 2011", the group said in its statement.

Turquoise runs on a system called Millennium Exchange, which is built by MillenniumIT, the spokesman said. Millennium Exchange is a scalable trading system that can process over 500,000 orders per second for multi-CPU, multi-server systems that use Infiniband high-speed interconnects, according to the system's website.

The service was down for all customers, whether or not they had IT hardware in the LSEG low-latency market-linked datacentre.