Citadel Systems Crashed During Market Crash

May 20 2010 | 2:26pm ET

Amidst the sudden, precipitous drop in the stock market last week, a technical glitch forced Citadel Investment Group’s market-making business to stop taking orders for exchange-traded funds.

Citadel Execution Services, which executes and routes trades for a half-billion shares every day, began to have problems at about 2:45 p.m. on May 6, according to The Wall Street Journal, five minutes after the market swoon began. Twelve minutes later, it told its clients in an email, “We are currently experiencing Equity system issues. We are advising clients to please route away.”

One of the firm’s key clients, the online brokerage TD Ameritrade, told the Journal, “there were a number of different destinations that we had to reroute.”

Citadel’s problems were with ETFs listed on NYSE Arca. It is unclear what effect, in any, the technical difficulties played in the market issues, which sent the Dow Jones Industrial Average down almost 1,000 points.

At about 3:30 p.m., Citadel began taking some orders again. The next day, it told clients its systems were back to normal.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note