On Monday, there was a serious technical problem with the New York Stock Exchange (NYSE), which led to incorrect trades for a number of important stocks, including Berkshire Hathaway, whose Class A shares saw a temporary decrease of 99.97 percent. Consolidated Tape Association (CTA) Security Information Processor (SIP) manages industry-wide pricing bands and disseminates real-time trade and quote data; this is where the problem lies. By switching to an earlier software version at a backup data center, the problem—which might have been caused by a new software release by the CTA—was overcome.
Numerous stocks were placed on hold when trades involving them went outside of the limit up-limit down bands. These stocks included Berkshire Hathaway and Chipotle. In spite of initial uncertainty and mistrust, there was no proof of a cyberattack. Rather, it was just a technical glitch.
Berkshire Hathaway’s share price dropped sharply from its previous close of $627,400 to $185.10 for a brief period of time. Later, after determining that the trades of Berkshire below $603,718.30 that took place between 9:50 and 9:51 am ET were incorrect, the NYSE canceled them all.
Barrick Gold and NuScale Power were two more stocks that were affected; these companies also had significant price fluctuations before their trading levels returned to normal. The technical problems had little impact on the overall stock market, however a few individual equities and exchange-traded funds experienced minor swings.
Joe Saluzzi of Themis Trading questioned the integrity of the trading process during the outage and raised suspicion about the NYSE’s explanation, pointing out the unusual nature of the price decreases. The technical issue was resolved, despite the confusion, and regular trade was restored.
