'Flash Crash' Concerns Fund Leaders

May 17, 2010

Top industry leaders and regulators are still trying to figure out what happened during the mysterious "flash crash" of May 6, when the Dow dropped 1,000 points and exchanges briefly fell off a cliff. While most or all of the erroneous trades in stocks and exchange-traded funds that took place between 2:40 p.m. and 3 p.m. that day have been canceled, more than 100 ETFs fell to mere pennies and then rebounded. If the crash had occurred at the end of the trading day, not only could it have wiped out investors' holdings, it could also have been a pricing nightmare for mutual funds.

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