By Julian Hattem - 04/25/13 11:00 PM EDT
A brief financial market plunge caused by a hack of the Associated Press's Twitter account on Tuesday should cause regulators to look into traders' use of social media, said a top watchdog.
Bart Chilton, one of five commissioners of the Commodity Futures Trading Commission (CFTC), believes that a false story from the news organization's Twitter account, which subsequently sent the Dow Jones Industrial Average plummeting about 140 points before a quick rebound, highlights the limits of current oversight.
Chilton said the brief but significant market disturbance, caused by a false report of an attack on the White House, "raises a bunch of policy issues" about regulators' limitations.
The incident calls into question "whether or not we should require additional safeguards for people who are trading in financial markets -- that they have additionally safeguards on these social media sites, because these things can have an impact on markets," he said.
"So that's a question I have, is whether or not we should require additional safeguards for social media sites for people who trade in the markets."
Chilton added, "There's definitely a curiosity factor at the CFTC and particularly with to me to see if anything else needs to be done."
Chilton confirmed that the CFTC was looking into possible misconduct during the market blip.
"It's standard operating procedure, and in this case we are probing a five minute period of time and looking at 28 different futures contracts," he said.
Other agencies, including the FBI, have announced they are looking into the incident, which was caused by a phishing attack on the AP.
A Syrian group acting in support of President Bashar Assad has since claimed responsibility for the hack.
"The bottom line is technology is moving faster than markets," said Chilton. "So we have a tough time keeping up."