SEC Blames Computer Algorithm For 'Flash Crash'

Lucas123 writes "The US Securities and Exchange Commission and the Commodity Futures Trading Commission today issued an 87-page report (PDF) on the results of a months-long investigation into the May 6 'flash crash' that sent the Dow tumbling almost 1,000 points in a half hour. The Commissions are holding a single trading firm's automated trade execution platform responsible for the crash, saying it dumped 75,000 sell orders into the Chicago Mercantile Exchange over a period of minutes causing an already volatile market to come crashing down. The SEC has already enacted some quick rules to pause trading if a stock price should rise or fall by 10% in a five minute period, but the regulators said they expect the results of the investigation to prompt additional rules limiting the functions of automated computer trading systems."

Comments

Ponzi scheme

[pinkishpunk]

stock markets has never been anything but a glorified Ponzi scheme, not based on the actual value, skilled works or goods of the companies involved. The more they try to fix they little scheme with rules, the more it should be obvious to even the most diehard liberalist.

Automated trading ~ Electronic voting machines

[rsborg]

They're both scams. Scams by the rich and established powers to prevent their apple-cart from ever getting upset. They are both extremely vulnerable and the respective lynchpins of critical parts of a developed country: the marketplace is the lifeblood of the capitalism, and voting is the core of democracy.

I used to be sure we lived in a capitalist democracy. Now I'm no longer sure. With the front-running and voting scandals, with enough "people being taking out of the loop", how do we know what's real anymore?

Oh, what's that you say, the corporate-controlled media will tell me all about it?

We're on the precipice of a potentially dark and troublesome time.

Re:Ouch

[GPLDAN]

You didn't have to tell us you were bad at grammar. The 'where' was enough.