The Corner

SEC to Probe Fat-Finger Funk

Bloomberg reports that SEC regulators will examine whether securities traders triggered and/or exploited Thursday’s stock plunge for illicit profits, by accidentally or purposefully executed trades to set off the Dow nose-dive:

The SEC and Commodity Futures Trading Commission said in a joint statement after U.S. markets closed that they will examine “unusual trading” that contributed to the plunge.

“We will make public the findings of our review along with recommendations for appropriate action,” they said.

SEC spokesman John Nester declined to comment on the investigations. The regulator will also look at whether traders tried to take advantage of the chaos, such as by entering orders that drove some stocks to pennies, according to the two people.

The SEC will also investigate the role of electronic trading in the sell-off, and the effectiveness of  automatic backstops built into the system to stop the hemorrhage. Some 27 U.S. stocks, including Accenture and Philip Morris, briefly lost more than 90 percent of their values before recovering.

Anyone ever read Debt of Honor?


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