NYSE: Levitt Wrong About Backup Readiness
October 30, 2012
The reputation of the New York Stock Exchange will suffer because it failed to have a backup facility to deal with Hurricane Sandy, Arthur Levitt, former chairman of the U.S. Securities & Exchange Commission said Tuesday in a radio interview.
The exchange said the chairman did not contact it to find out what its plan was and that he was ‘irresponsibly wrong’ in making his on-air comments.
“People look to the New York Stock Exchange as being the symbol of American capitalism, and to see the exchange go down for two days without an adequate backup plan is very, very unfortunate,” Levitt said on a Bloomberg Radio interview. “To see the New York Stock Exchange crippled is a body blow that will really shake the image of that institution for a long time to come.”
NYSE Euronext closed its markets across Monday and Tuesday, the first consecutive days because of weather since 1888, as Sandy barreled into New York City. All other national exchanges, which also have backup facilities and plans, also closed.
“Mr. Levitt is appallingly and irresponsibly wrong,” said Robert Rendine, a spokesman for NYSE Euronext. “Our back-up plan to trade on a fully electronic basis was ready to be implemented.”
“However, given the impending storm, it was increasingly clear that it would be extremely difficult to ensure the safety of our respective employees, and the entire industry decided it was best to close the markets,” he said in an e-mailed statement today.
No U.S. exchanges actually operate in lower Manhattan any longer, even though the New York Stock Exchange maintains a trading floor at 11 Wall Street.
The data centers that house their operations are all across the Hudson River, in Carteret (Nasdaq), Mahwah (NYSE), Secaucus (Direct Edge) and Weehawken (BATS), N.J.
Nasdaq’s backup facility is in Ashburn, Va. BATS’ is in Nutley, N.J. Direct Edge’s is in Clifton, N.J.
NYSE Euronext’s $250 million Mahwah data center, which opened in 2010, was unaffected by the storm, Rendine.