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Friday March 3 2:33 AM ET

Web Trading Site Outage Tied to Hackers...Sort Of

NEW YORK (Reuters) - Hacker attacks can be used to explain a host of Internet ills.

Online brokerage National Discount Brokers Group Inc. (NYSE:NDB - news) gave new definition to the latest criminal phobia by blaming recent outages at its online trading site on ''hacker-like'' attacks by an unnamed Web software maker. In a statement Thursday, the Jersey City, N.J.-based online share dealer said periodic disruptions since last Thursday to its site at http://www.ndb.com were the result of software incompatibility with products of the outside company.

The explanation appeared to step back from comments by a company executive when the disruptions began at the NDB.com site last week. At that time, Chairman Dennis Marino said the site outages ``had the earmarks of a hacker attack.''

As a result of what it now said was software conflicts, the company said its NDB.com site had been subjected to ``several instances of hacker-like denial of services'' which precluded some of the company's customers from reaching the Web site. NDB said it was mulling legal action against the company.

By contrast, last month's assaults on major Web sites such as Yahoo! Inc. (NasdaqNM:YHOO - news), eBay Inc. (NasdaqNM:EBAY - news) and E+Trade Group Inc. (NasdaqNM:EGRP - news) were widely believed to have involved the more conventional explanation of hacker attacks: computer break-ins by Internet vandals.

Through a method known as ``denial of service,'' hackers set up automatic programs that bombard Web sites with so many information requests that legitimate users cannot log on, law enforcement officials have said.

National Discount said it had been in contact with the software maker and is working to correct the problems with the software program but that it was also seeking ``appropriate judicial relief.'' On the busiest day of Web site attacks in February, Datek Online Holdings Corp. another online broker, had initially joined the chorus of companies blaming hackers for the site's disruptions.

However, it later retracted the comments and said the outage was caused by an equipment breakdown by an outside network supplier. The 35-minute outage occurred at the opening of U.S. stock markets, a peak usage period for trading sites.

In its own explanation, a spokesman for National Discount declined to go beyond the wording of its news release and referred calls to the company's legal counsel. The in-house lawyer did not immediately return calls seeking comment. NDB said the situation had resulted in an overall periodic slowdown of Web site performance as well as delays in reaching customer service agents and registered representatives, crucial issues for a business built around quick trading transactions.

This could help explain why average transaction processing time at NDB for the week of February 22-25 ranked at the bottom of an index of 16 Web broker sites compiled by Keynote Systems Inc. (NasdaqNM:KEYN - news), a company that tracks Web site performance.

According to Keynote's weekly Web Broker Trading Index, NDB customers had to wait an average of 43.9 seconds to reach National Discount's site, twice as slow as the next slowest online trading site.

National Discount stressed that at no time during these incidents was any customer account accessed and no customer account information was affected. The outage meant its 200,000 customers could not funnel stock orders through the firm's Web site, although they could relay orders over the phone.

The company said that it had determined the cause of the service outages by working with law enforcement officials, regulatory agencies and NDB.com's in-house technology staff.

NDB has also instituted a number of additional anti-hacking measures on its computer systems, it said.

Link: http://dailynews.yahoo.com/htx/nm/20000303/tc/hackers_ndb_1.html

-- (alsohelping@home.now), March 04, 2000

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-- (link@link.link), March 04, 2000.