(WASHINGTON) -- The Securities and Exchange Commission said Friday that a major sell-off by a mutual fund caused the so-called "flash crash" back on May 6 that caused the Dow to drop nearly 1,000 points in minutes.
Identified by The Wall Street Journal as Kansas-based Waddell & Reed, the company apparently decided to sell $4.1 billion worth of futures contracts, electing to computerize the order.
Within 20 minutes, computers pushed the volume of shares onto the market, effectively flooding it and triggering other automated sell orders, which snowballed into the massive sell-off. Manually entering the trade could have taken five hours.
Regulators have recalibrated market circuit breakers and the report says the SEC will determine whether that is enough.
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