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

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...