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: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

Five Tips For Successfully Marketing Your Hedge Fund

Jan 30 2015 | 9:14am ET

When it comes to the hedge fund industry, the notion of “build it and it will...

 

Editor's Note