Nasdaq suffers further trading embarrassment

The Nasdaq stock exchange in New York has warned that people should check for 'erroneous trades' after a glitch caused Kraft Foods shares to rocket almost 30%.

by Michael Northcott
Last Updated: 19 Aug 2013

An uncomfortable morning for Nasdaq, after it had to cancel trades in Kraft Foods because a glitch sent the share price soaring 30%. In a statement, the exchange said: ‘Participants should review their trading activity for potentially erroneous trades and request adjudication through the ‘Clearly Erroneous’ process within the applicable timeframe for filing pursuant to the rule.’ Eh? 

Let’s hope their adjudication process is bit simpler than eBay’s…

They added: ‘Trading in Kraft was affected by a broker error that impacted multiple stock exchanges. Nasdaq’s systems performed normally and the industry’s process for handling these issues works as intended.’

The error came right near the completion of Kraft’s switch to being newly-listed on Nasdaq, and evoked memories of the botched Facebook IPO which left many investors millions of dollars out of pocket. Just a few weeks after the Facebook glitch, a similar software screw-up at Knight Capital lost the company $440m and nearly bankrupted it.

Just yesterday, US regulators had meetings to discuss concerns about the effect technology was having on trading and overall market volatility. Quite a lot, by the look of it.

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