Which U.S. agency investigated the 2010 Flash Crash alongside the Commodity Futures Trading Commission?
Answer
Securities and Exchange Commission
The Securities and Exchange Commission investigated the 2010 Flash Crash alongside the Commodity Futures Trading Commission.
On May 6, 2010, major U.S. stock indexes plunged and then recovered much of the loss within minutes. The Dow Jones Industrial Average temporarily fell nearly 1,000 points, while many individual securities traded at extremely unusual prices.
The SEC and CFTC issued a joint report examining market conditions, order flow and automated trading. The investigation concluded that a large sell order in an already stressed market contributed to the rapid decline, while high-frequency trading and fragmented liquidity amplified the movement.
The event led regulators and exchanges to improve safeguards, including single-stock circuit breakers and market-wide trading pauses. It is distinct from a conventional multi-day crash: the defining feature was the extraordinary speed of the fall and partial rebound.