Statement of Commissioner Bart Chilton Regarding Preliminary CFTC-SEC Staff Findings Regarding Flash Crash Market Events

From what we know so far, there was no one factor that was responsible for what happened that Thursday but rather a number of factors that caused the market to plummet and then rebound in a very short period of time.  Further examining those factors will be crucial so that rules, if needed, can be put in place to prevent such disruptions.  With massive computerized trades occurring in nanoseconds, we need  ‘deep breath mechanisms’ that give markets time to restore order and required liquidity.  A more standardized system that briefly halts trading is warranted when the price of a commodity or security is experiencing excessive volatility that could jeopardize markets, and ultimately consumers.

I commend the staffs of both agencies for presenting this incredibly thorough report.  In a very short period of time, we’ve been able to receive great detail about the events of May 6 that will be useful as our joint advisory committee begins its work next week.  I look forward to the advisory committee’s final report to the commissions on their findings and recommended actions.  At that point, we can make determinations as commissions regarding possible rules, regulations or needed legislative changes to our respective acts.

Last Updated: June 14, 2010