The Federal Bureau of Investigation has discovered vulnerabilities in the government’s system for preventing market-moving economic reports from leaking to traders before public release, reports Brody Mullins and Devlin Barrett of The Wall Street Journal.
Mullins and Barrett write, “The black boxes are key to the government’s control of the data. Media firms in the business of reporting economic data are required to connect their computers to the black boxes, which operate like a trapdoor, releasing articles and data streams when the embargoes lift. In theory, all the data should be released at the same time.
“The investigative report, which was completed in May and obtained through an open-records request, indicates that the FBI’s concerns are based on testing of black boxes at its Quantico, Va. facilities. The report didn’t say whether the FBI knows of any specific instance in which anyone knowingly exploited the weaknesses. Many of the technical flaws involve different ways in which the black boxes can be bypassed.
“The report focused primarily on a short-lived probe of Bloomberg L.P., which was exonerated of any wrongdoing. The Bloomberg issue began in May 2012 when the media firm installed new devices in the Commerce Department to speed up delivery of data to subscribers, according to the Commerce report.
“In its own testing, Bloomberg found it could get around the black box in several ways, such as sending data using different electrical current.
“Bloomberg reported the flaws to the Commerce Department last summer and didn’t use the devices in any data releases, Bloomberg told investigators, according to the report. After Bloomberg alerted the department, the FBI conducted a “consensual seizure” of its computers for testing.”
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