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Computer Glitches at Major Corporations; Pier Shooting in San Francisco. Aired 2-2:30p ET

Aired July 8, 2015 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[14:00:12] ANNOUNCER: This is CNN breaking news.

BROOKE BALDWIN, CNN ANCHOR: All right. Here we go. Breaking news on CNN. I'm Brooke Baldwin. Thank you so much for being with me.

Listen, if you've been paying attention the last couple of hours, you know the deals, these three major technical malfunctions today bringing three huge U.S. operations really to their knees. You have the New York Stock Exchange suspending trading for more than two hours now after experiencing this internal technical issue. It all started at 11:32 this morning. And as we come to you here live right now, activity on the stock exchange floor still virtually nonexistent. We'll take you there. Traders sort of scratching their heads in this sort of - more or less information vacuum, wondering what the heck's going on. I don't know how much they're really panicking here as the Dow plummeted on the back of what the New York Stock Exchange insists is quote/unquote, "an internal technical issue."

Adding to that mystery, at the very same time, "The Wall Street Journal's" home page went dark. And earlier this morning, airlines, United Airlines, grounded thousands of flights worldwide because of what it's calling a network connectivity issue. To be clear, not a cyber-breach is what we're hearing really with all of the above, but still odd that this is all happening on the very same day.

Let's have a big conversation about this and see what we know at this point, two more hours here of the trading day. So things typically getting busy. Let's go first - we have Alison Kosik, I have CNN Money's Paul La Monica, and also joining us, cyber security expert Rob Beckstrom, and our aviation correspondent Rene Marsh will also join us. So lots of voices here.

But, Alison Kosik, to you first and foremost there at the stock exchange. What happened?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: That really is the question of the day, Brooke. No one really knows or no one's saying what happened, maybe because they just don't know. I talked with one trader and he said he was just working along and suddenly the music just stopped.

Now, we did get some indication that there may have been some sort of issue, technical issue, before the trading day began. Traders here on the floor of the New York Stock Exchange were sent an e-mail alert from the New York Stock Exchange, which isn't something that happens every day, but it's not necessarily unusual. And in that alert, the stock exchange said there was a reported issue or some sort of technical issue with about 220 stocks listed on the New York Stock Exchange, meaning you couldn't buy or sell those stocks. That issue was resolved around 10:45 today and all seemed fine until around 11:30 when, once again, as that trader said, the music just stopped.

Brooke.

BALDWIN: OK. Let me come back to you because I want more from what's really happening on the floor and what you've been hearing from some of these traders.

But, Paul La Monica, let me turn to you and, Marty, if we can take a two-shot and, guys, throw, as we have the big board behind us, because this is - this is what's perplexing me. If we're talking about, you know, the stoppage on markets, I'm still watching some of the numbers ticking. Explain that to me.

PAUL R. LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Yes. Alison joked earlier that many traders are just playing video games right now, but it's not completely dark for people that invest for a living. You have the Dow still moving because some of these stocks on the NYSE are trading on other platforms that haven't been affected. Also, there are companies like Apple, Microsoft and Intel, they're in the Dow but they don't trade on the NYSE. They're listed on the Nasdaq. So they haven't been affected by this either.

BALDWIN: Bigger picture in terms of we've been talking a lot about Greece and will they or won't they stay in the Eurozone and what's happening there. We talked just the other day about, you know, China and the markets really taking quite the plunge there. So you already have nerves frayed globally. But whenever this resumes, will this at all impact global markets or just someone like me who maybe has a little money in the markets?

LA MONICA: There might be a short-term dip as a result of this. It definitely does shake confidence even for professionals who do this for a living.

BALDWIN: Yes.

LA MONICA: But the bigger picture really is that the stock market was down today pretty sharply before this even happened because, as you mentioned, China, their stock market is in complete chaos right now and that's making a lot of people nervous, and we still don't know what the heck is going on with Greece. The next deadline is Sunday.

BALDWIN: Right.

LA MONICA: Are they going to stay in the Eurozone or not? That's what the pros are really worried about, not this.

BALDWIN: We know - we know, you know, at a higher level the White House has reacted to this. Josh Earnest speaking to the press pool just a little bit ago at the top of the daily briefing. Let's take a listen. (BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: One of the most important elements of our strategy for safeguarding the nation's computer networks from cyber threats is effective communication and sharing of information between private sector officials and the federal government, particularly those elements of the federal government that are responsible for responding to cyber threats. The New York Stock Exchange does have an effective information-sharing relationship with the federal government, and I think that information that I shared with you is an indication of how valuable that kind of information sharing can be.

(END VIDEO CLIP)

[14:05:18] BALDWIN: So, Rod, let me just come to you and ask you this point blank because, you know, when you're talking about technical glitches or connectivity issues, all on the same day, you know, and very clearly officials saying this is not the result of a cyber- breach. It just makes me wonder if somebody does have nefarious intention, how easy something can happen.

ROD BECKSTROM, CYBER SECURITY EXPERT: Sure. Well, obviously it's a bad day out there and it's strange. It's like the cross - the stars are very crossed. Now, clearly, the technical staff of these organizations believe it's not a hack or they wouldn't be coming out with these statements. However, it's interesting that these are very three iconic American brands and entities that relate to, you know, our country, United Airlines, "Wall Street Journal," and the New York Stock Exchange. So all of a sudden, you know, you can start imaging that there might be a - a motive of some parties to send some kind of a signal. It does not appear to be, you know, motivated by criminal hackers trying to take money. So it's interesting what kind of hacktivists or political hackers, if any, are taking this action or is it just strange coincidence and the stars are crossed?

BALDWIN: Let's hope it's just a strange coincidence and that the stars are crossed, right, for all of our sakes so it is - it is quite an odd coincidence.

Rene Marsh, on the airline angle, so it was United who grounded, what was it, 5,000 flights, all because of an issue with their reservation system?

RENE MARSH, CNN AVIATION CORRESPONDENT: Right. So nearly 5,000, we're talking worldwide, their operations were impacted by this very widespread computer problem. According to the airline, this is a router that was affecting their computers or their networks connectivity. So essentially the ability for their computers to talk to one another. That was a problem. It wasn't happening and it wasn't happening effectively.

However, an airline source is telling me, knocking it down, saying this by no means was the act of a hacker and it was not at all in any form connected to what we're seeing happening at the New York Stock Exchange. And we know that the Department of Homeland Security Secretary Jeh Johnson just sounded or echoed that sentiment a short time ago saying that he himself spoked with the CEO of United, and at this point he has been informed that it has nothing to do with a hacker.

So it looks like this is a system problem, a technical problem that they are dealing with. We do know that they've resolved that issue and flights are now taking off once again. But, Brooke, the damage really is already done, even though these flights are taking off. There's still thousands of passengers out there who are dealing with delays and crews that have to be swapped around because they may have run out of hours. So the problems haven't ended yet, although they've resolved the computer issues.

BALDWIN: OK, Rene, stand by.

Alison Kosik, back to you at the New York Stock Exchange. I mean I'm looking at my clock. I have 2:08 Eastern Time, right, so this is typically when things really start picking up, especially that final hour, that final half hour. Nothing so far. My question would be, if it doesn't resume by the end of the trading day today, then what?

KOSIK: That is - that really is a good question, but the New York Stock Exchange president is on the floor of the exchange right now actually speaking with another network saying that the plan is, is to reopen the New York Stock Exchange around 2:45 or 3:00.

BALDWIN: Ah, OK.

KOSIK: That it's not quite ready to open just yet. He says that he wants to open the stock exchange before the close of trading. So that clock is ticking. We're less than two hours away until that closing bell rings.

And, in fact, I spoke with a trader earlier and he said, we've got to get the trade open today. I said, why? He said because of confidence. They want it even just for a half hour get the trade back going for confidence.

Brooke.

BALDWIN: OK. Then let me take that note and end with you, Paul La Monica. If we're hearing now, and this is the first we're hearing of this on CNN, that the president of the New York Stock Exchange is saying in about 40 minutes from now, 40 to 50 minutes from now, they're going to re-open the exchange. How will, in terms of volatility, panic, not really panicking, you know, you were talking about confidence for people who are maybe sort of the Wall Street naysayers, maybe this would affect them. What will things look like?

LA MONICA: It's psychologically important to get the market open today.

BALDWIN: Totally, right?

LA MONICA: I definitely agree with what everyone's saying. On the trading floor, it's going to be very interesting to see what stocks do, if they do, in fact, open for that final hour, hour and 15 minutes of trading.

BALDWIN: Should people get in at the last minute?

LA MONICA: I think anyone that's not doing this for their daily life -

BALDWIN: Yes.

LA MONICA: It's not their calling -

BALDWIN: Yes.

LA MONICA: Just sit tight. If you've got a 401k, don't even look at it today.

BALDWIN: OK.

LA MONICA: One thing that is amusing to note, even though no one thinks that this is all about cyber security and hacking, there are a lot of stocks that are in the business of selling cyber security solutions. There's even a fund with a ticker HACK. It's up today while the rest of the market's down.

[14:10:09] BALDWIN: HACK. Hack, ladies and gentlemen. The irony, the fun. The sense of humor, I guess, some people have here. We'll be watching for them to reopen.

Alison Kosik, Paul La Monica, Rod Beckstrom and Rene Marsh, thank you very much.

More on the breaking news here, and the unusual situation unfolding at the New York Stock Exchange. A computer glitch bringing trading to a halt today. Again, we'll get you the full statement from Jeh Johnson, the Homeland Security secretary, what he has just said. He was actually at this cyber security event just this past hour. We'll play that for you.

Keep it here. You're watching CNN's special live coverage. We'll be right back.

(COMMERCIAL BREAK)

BALDWIN: We're back with our break news. I'm Brooke Baldwin. You're watching CNN.

[14:14:56] Right now the New York Stock Exchange still at a standstill since 11:32 this morning Eastern Time all because of this technical issue. But, as we just heard, reported from the New York Stock Exchange, from our Alison Kosik, we are hearing from the president of the New York Stock Exchange that they will resume trading in about 40 minutes from now.

Adding to this intrigue, at the very same time today, "The Wall Street Journal's" home page went dark and this morning United Airlines planes worldwide were grounded after what we're told there was a computer system malfunction, some sort of network connectivity issue, all happening in the same day. Listen, a lot of people still scratching their heads over this.

Let me bring in CNN global affairs correspondent Elise Labott, and Juliette Kayyem, CNN national security analyst.

Ladies, welcome.

And, Elise, to you first. I mean even though, you know, listen, we're hearing it's a glitch. It's just a little technical issue. Still, at very high levels. The president's been briefed. The FBI was called. And Jeh Johnson has spoken about this.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: That's right, Brooke, and I think it shows the initial level of concern of the administration to make sure that this wasn't some wider type of issue, some U.S. hack or cyber-attack. President Obama was briefed. The FBI did reach out to the New York Stock Exchange. Obviously, they always have close cooperation with agencies of this nature.

And here at the State Department I checked and they've already looked into their systems and the State Department spokesman, Mark Toner, just said that there were no affecting of the State Department computers. So clearly every U.S. agency right now looking at their own systems to see if this isn't something wider.

And even though they seem terribly coincidental, you have to take into context of the wider climate that exists in the U.S. There have been a lot of hacks, a lot of cyber-attacks. Just last month you had the U.S. government computers hacked, thousands of security records, personnel records obtained. The U.S. believes it was China. No one is officially saying that and clearly the Chinese have denied it. And a year before you had that big Sony attack, that hack, by North Korea, the U.S. believes. And so this is a - everybody feels very vulnerable and why this does seem to be a bunch of wacky coincidental technical glitches, surely the administration is watching it very closely.

BALDWIN: Wacky indeed, Elise Labott. And, you know, we mentioned, Juliette, before I come to you, the DHS secretary, Jeh Johnson, he was at some sort of cyber security event just last hour, and this is what he said.

(BEGIN VIDEO CLIP)

JEH JOHNSON, HOMELAND SECURITY SECRETARY: It appears that today we had system malfunctions at United, at the New York Stock Exchange and "The Wall Street Journal." I have spoken to the CEO of United, Jeff Smisek, myself. It appears, from what we know at this stage, that the malfunctions at United and the stock exchange were not the result of any nefarious actor. We know less about "The Wall Street Journal" at this point, except that their system is back up again, as is the United Airline system.

(END VIDEO CLIP)

BALDWIN: All right, so that was Jeh Johnson just last hour.

Juliette, before we get into the what ifs, how are all these people coming forward and saying, technical glitch, how were they able to check that so quickly?

JULIETTE KAYYEM, CNN NATIONAL SECURITY ANALYST: Well, what - at least - let just - let me just go back for a second and talk about different domains in the cyber world for those of us in security.

BALDWIN: Su re.

KAYYEM: There is the .mil, which is military, controlled by the Pentagon, .gov, which is supposed to be protected by DHS, and then just plain old .com. So if you look at these glitches today, they're all .com, right? So they're all sort of in that open space which everyone is dependent on the institution, the private company, the NYSE, to sort of create their own cyber defenses. So all of those places, "Wall Street Journal," United, NYSE have pretty sophisticated teams who, at least from the - from the - what they're looking at, know that there was no outside infiltration that somehow some glitch got into the system that caused this - what they're claiming to be separate, sort of, you know, malfunctions in each of the systems.

What I - take a step back is, I would never assume that something like this is a coincidence. So I'm sort of surprised how quickly everyone's coming out. I would assume that there might be something going on and then bring it -

BALDWIN: That's what everyone's saying so far.

KAYYEM: Yes. Pardon?

BALDWIN: I'm just say, that's the word we keep hearing over and over, coincidence.

KAYYEM: Yes.

BALDWIN: You're not buying it?

KAYYEM: I would assume the opposite. It's not that I'm not buying it. It was just - everyone came out so quickly. Why would you assume it's a coincidence knowing that our .com system is pretty vulnerable? I mean, in other words, we should look at it like it's not a coincidence and then figure out whether - well, there just happened to be these big glitches all on the same day at relatively the same time and there's no proof that any of these companies were upgrading systems, were doing anything that would have caused glitches to occur simultaneously.

[14:20:07] BALDWIN: So then what would explain this and, slash, doesn't this really speak to the vulnerabilities of these three different, fairly major entities?

KAYYEM: I think we have to assume that the .com space and even the .gov space are relatively venerable just given the nature of the cyber networks and the interconnectedness, right? So we just - that - that's going to happen. And so cyber security is really about putting up a number of defenses, redundancies, backup systems so that the whole system doesn't go down simultaneously. And so that's what I find interesting about this is that this glitches brought down entire systems. No cyber network is really built that way. You'd want to have a whole bunch of redundancies and backups to insure that one glitch doesn't bring down the whole system. So that's what I would be looking at this stage and then later on you can say, well, it just happens to be a coincidence.

BALDWIN: OK. Juliette Kayyem, thank you. Elise Labott, thank you as well.

Again, just a reminder, hearing that the - it should be reopened, the New York Stock Exchange, in about 20 minutes from now. We're watching. You can watch it, cnnmoney.com.

Next, new information into the shooting death of a young woman on a San Francisco pier. This man here, Juan Francisco Lopez Sanchez, says he found the guns. Officials say the weapon was stolen from the car of a federal agent. And now we have new details on that gun. That's coming up.

(COMMERCIAL BREAK)

[14:25:47] BALDWIN: A new revelation in the shooting death that's added fuel to this immigration debate in the race for the White House. CNN learning a federal agent's stolen gun was used to shoot and kill Kate Steinle as she walked with her father on a busy San Francisco pier, middle of the afternoon, broad daylight. The man now charged with her murder, undocumented immigrant Juan Francisco Lopez Sanchez, a man who had been deported five times already, was in the city because of this sanctuary law. That's what he told a local reporter himself. It's an ordinance that bans handing immigrants over to federal officials without a court order, even repeat felons like this suspect who wound up shooting and killing this woman with a stolen gun.

Dan Simon is live in San Francisco for us with more on this today.

And so, you know, as we've spoken, Sanchez has told now local media two stories, one that he found the gun and that it accidentally went off, the other was what?

DAN SIMON, CNN CORRESPONDENT: Well, Brooke, first of all, that's Pier 14 behind me and that's where this all went down exactly one week ago today. And when this happened, the question that everybody had was, where did the gun come from? We're talking about somebody who's been convicted of seven felonies. He's been deported five times. How does somebody like Sanchez get ahold of a weapon? And perhaps we're getting a little bit more clarity.

So what we've been told is that this was a federal agent's weapon. And a source tells us that the age actually worked for the Bureau of Land Management and that his car was broken into sometime this summer. Now, we're also told that this weapon was his personal weapon, not a government-issued weapon. So that tells us a little bit about the gun.

Now, in terms of what Sanchez says, is he says that he found it underneath a bench, that it was wrapped in a t-shirt. How exactly he came into possession of this weapon, that's still a part of the investigation.

Brooke.

BALDWIN: And to be clear, you know, he, in that interview, that jailhouse interview with the local reporter said, yes, I shot her, but he has pleaded not guilty.

SIMON: He has pleaded not guilty. He's being held on $5 million bail. And when you look at him in the courtroom, he seemed to be all over the place to be quite honest. I don't know if we're talking about a cognitive issue here, but when the judge asked him questions that weren't pertaining to, you know, if he's guilty or not guilty, he just kept repeating the same thing, not guilty. The court date has been scheduled for July 27th, not guilty.

So we talked to his lawyer afterwards and he said he thinks that his client understood what was going on in the courtroom, but he also said we're talking about somebody who just has a second grade education.

Brooke.

BALDWIN: Dan Simon, thank you.

We have more on our breaking news, the unusual situation unfolding at this moment and has been for the last couple of hours at the New York Stock Exchange. This computer glitch bringing trading to a total halt, specifically with the NYSE. We're learning they may resume trading -- we're watching the clock and live pictures of the floor here - in about 10, 15 minutes from now. We'll take you there live coming up.

Also ahead, Joyce Mitchell, that prison seamstress at the Clinton Correctional Facility who helped those two convicted murderers escape, you know she's been in custody. What could she face? We'll talk to a former prison worker who also helped a prisoner escape and served time herself. Her unique perspective, next.

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