The top U.S. securities regulator said no single event had been found to explain Thursday’s mysterious market plunge but the events were unacceptable and additional safeguards were coming.
U.S. Securities and Exchange Commission Chairman Mary Schapiro said it would take time to pinpoint the cause but reiterated an agreement with major exchanges to strengthen trading curbs in response to large market moves.
In prepared testimony for a congressional hearing later yesterday, Schapiro said SEC staff were now on site at all major markets to monitor trading conditions.
“The markets failed many investors on May 6, and I am committed to finding effective solutions in the very near term,” she said in written testimony to the House Subcommittee on Capital Markets.
Schapiro said regulators were still sifting through more than 17 million trades in listed equities in the hour beginning at 2 p.m. on May 6, and she cited the growth of trading in multiple markets over the past few years for the complexity of the probe.
But in some preliminary observations, Schapiro sounded skeptical that a large erroneous trade, the so called “fat finger” scenario, had triggered the brief stock rout.
She gave greater weight to theories that a confluence of events were responsible, but had come to no conclusion.
Schapiro also said there did not appear to be any unusual trading in Procter & Gamble Co.’s stock ahead of the decline.