Warner Calls for ‘Thorough’ Probe of Nasdaq Glitch
Sen. Mark Warner (D-Va.) Aug. 23 urged Securities and Exchange Commission Chairman Mary Jo White to “undertake a thorough investigation” of a technology glitch at Nasdaq OMX Group Inc. that shut down securities trading a day earlier.
Nasdaq halted all trading for several hours Aug. 22 after it experienced a computer error with respect to the pricing of securities (164 SLD, 8/23/13). The glitch affected several other exchanges, which also stopped trading of Nasdaq-listed stocks.
“Such glitches have serious consequences,” Warner said in a letter to White. “When an exchange fails to function properly, as was apparent on August 22, this type of event impedes our economy by eroding consumer confidence.”
Warner also said that the incident is the “second major recent disruption to markets caused by” a Nasdaq glitch. The senator cited the issues with the initial public offering of Facebook Inc. (FB) (100 SLD, 5/24/12). The social media giant trades on Nasdaq but experienced technical hiccups during its trading debut in May 2012. Nasdaq recently agreed to pay a record $10 million to settle administrative proceedings related to the Facebook IPO (104 SLD, 5/30/13).
In the wake of the latest error, White said she would advance rules the SEC proposed earlier this year to fortify trading systems. Warner asked that the SEC “report back to Congress on what steps can be taken to ensure such disruptions can be avoided in the future.”
Warner’s letter can be seen at http://op.bna.com/srlr.nsf/r?Open=mlon-9aup7a.