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How a Bogus Tweet Can Wreak Financial Havoc

April 29, 2013 at 12:00 AM EDT
When hackers sent out a bogus tweet from the Associated Press' Twitter account, the financial markets took a minutes-long nosedive. For more on how social media affects our world, NewsHour political editor Christina Bellantoni talks to Daily-Download.com's Lauren Ashburn and Howard Kurtz of Newsweek and CNN.
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JUDY WOODRUFF: Now our look at how social media affects and infects the world we live in.

NewsHour political editor Christina Bellantoni is here with the Daily Download team.

CHRISTINA BELLANTONI: We learned last week that a tweet can send markets crashing in a matter of minutes. How can news outlets protect themselves from hacking? And how difficult is it to stop something once it goes viral?

We discuss the issue now with two journalists from the website Daily Download. Lauren Ashburn is the site’s editor in chief. Howard Kurtz is Newsweek’s bureau chief and host of CNN’s “Reliable Sources.”

Lauren, Howie, thanks for being here.

Last Tuesday, we saw that the Associated Press sent out this tweet to 1.9 million followers. What exactly happened here?

LAUREN ASHBURN, Daily-Download.com: Well, the tweet as you can see here says: “Breaking: two explosions in the White House and Barack Obama is injured.”

Everybody went crazy online. It was retweeted 1,800 times to the Associated Press’ almost two million followers. And after that, we saw a drop in Standard & Poor’s, in the stock market.

HOWARD KURTZ, Newsweek/CNN: And $136 billion lost. Of course, most after that rebounded in the seven minutes that it took for people like me to start rushing over to the White House and find out there were no explosions and for the Twitter to suspend the Associated Press account, which obviously had been hacked, which we all suspected.

CHRISTINA BELLANTONI: And which the AP then put out a correction, saying this did not actually happen.

LAUREN ASHBURN: They said this is a bogus AP tweet, which I thought was very short and tight.

HOWARD KURTZ: And yet AP had some indication that somebody was trying to break into the system.

LAUREN ASHBURN: They did earlier. And they had actually sent out a warning to all of the 2,000 journalists plus all of the other people who work at the AP saying someone is trying to phish or get into our system. Do not click.

CHRISTINA BELLANTONI: And the phishing scams, this happens when somebody might send you a link that looks like an article. In this case, it was Washington Post and Reuters articles. And then if you click on it, it’s asking for your data.

HOWARD KURTZ: Exposes your password.

What with underscores I think, Lauren, is the way that Twitter has become threaded into the fabric of our society. It’s now OK, according to the government, for companies to deliver what is called market-moving information through their Twitter feeds. Bloomberg News terminals, which many traders rely on for those split-second trades, now include Twitter.

If there’s a hack, if there’s a false tweet — and we saw this with China hacking into the New York Times website.

LAUREN ASHBURN: We saw it with “60 Minutes” as well.

HOWARD KURTZ: Right. It’s almost becoming the new normal.

And it cannot only put out false information to the whole world in the blink of an eye, but can affect the stock market.

CHRISTINA BELLANTONI: What are the consequences here? What are we seeing to sort of curtail this potential problem?

LAUREN ASHBURN: Well, this really goes to the power of social media.

We need tighter password restrictions. And a lot of sites have things that are called two-step verification. Twitter doesn’t. Two-step verification means that you have to get your password from a different place. So it has to be sent to your phone. And so there’s actually two steps in creating a password and getting that password.

HOWARD KURTZ: Twitter now looking into adopting that.

This is a black eye for Twitter, no question about it, even though it wasn’t Twitter’s fault. Tomorrow, the Commodity Futures Trading Commission is going to have a hearing tomorrow because as we mentioned the billions and billions of dollars that are traded on sometimes false information if there are hackers involved on how to tighten up the system, how this can be prevented from triggering a run on stocks.

CHRISTINA BELLANTONI: Well, and this all comes as it shows people are more engaged than ever on social media online. We have this new Pew Research Center study that we have been taking a look at here. What is it telling us how about people engage on social media?

LAUREN ASHBURN: Well, we have seen a big increase from the last political election to this one. And we have a graphic to show exactly how that is happening.

People are posting political articles on social media at a much greater rate. It has been 28 percent this election and it was 11 percent in 2008.

HOWARD KURTZ: And friending a political candidate has also jumped from four years ago to last year.

This is great because social media is such an efficient and fun and vibrant way of putting out information. But as that hack last week underscores again, you have got to be wary, whether you are a consumer, whether you are a journalist, or whether you are somebody who has got a few dollars in the stock market.

LAUREN ASHBURN: But you also have to understand that as social media is growing and growing so rapidly that the back end of all of these organizations need to catch up and put in tighter security controls.

CHRISTINA BELLANTONI: Right. We have seen that from the media to the stock market, you know, the world market, and now to politics, of course.

Thank you very much, Howard Kurtz, Lauren Ashburn, Daily Download.

HOWARD KURTZ: Thank you.

CHRISTINA BELLANTONI: Online, you can find a number of resources that can help you protect your accounts and our how-to guide for what to do if you are hacked. That’s at NewsHour.PBS.org.