Commodity Futures Trading Commissioner Bart Chilton said agency
officials are looking into trading that took place after the
Tuesday Twitter hoax that sent markets careening sharply lower in a
matter of minutes.
Mr. Chilton, a Democrat, told The Wall Street Journal that the
CFTC is looking into the trading of 28 heavily traded futures
contracts during a five-minute period after a false tweet from the
Associated Press's Twitter feed said there were two explosions at
the White House and President Barack Obama was injured. A group
identifying itself as the Syrian Electronic Army claimed
responsibility for the fake tweet.
AP quickly said the tweet was the result of an outside group's
hack, but by then the market had already nosedived. Automatic
trading systems had pulled back from trading or started selling as
the decline accelerated, potentially turning what was a short-lived
dip into a dramatic selloff that erased some $200 billion from the
stock market.
A number of futures contracts also fell sharply, including the
heavily traded E-mini contract, which is tied to the Standard &
Poor's 500-stock index. The market snapped back within minutes, and
stocks ended the day in the black.
The selloff "raises larger questions about how technology is
used" in the market, Mr. Chilton said. "Somebody lost money, and
not everybody who got out got back in."
The Securities and Exchange Commission is also looking into the
event.
Write to Scott Patterson at scott.patterson@wsj.com
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