The Bank of England has admitted that hedge funds was hacked into a high-speed live feed of its press conferences in the hope of profiting by reacting to the governor Mark Carney’s words before other investors.
High-frequency traders could have used the information to gain an advantage over their rivals. Carney’s comments were broadcast online and sometimes carried on to the television, can often move currency and bond markets if they give hints on the future path of interest rates.
The unnamed traders gained access to a backup audio feed run by a third-party supplier, it was put in place in case the main feed failed.
The third-party supplier reportedly charged clients between £2,500 and £5,000. The Bank has referred the case to the Financial Conduct Authority (FCA), the separate regulator that oversees investment firms, and it has already sparked a wide-ranging review of security at the Bank’s Threadneedle Street headquarters.
The breach will cast a shadow over the final six weeks of Carney’s term as governor. He will leave the Bank on 31 January after carrying out one more interest rate press conference on 30 January. An announcement on his replacement by the chancellor, Sajid Javid, was expected before Christmas.
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