New York: US Securities and Exchange Commission Chairman Mary Schapiro said the agency's enforcement unit had issued subpoenas in the investigation of last week's stock plunge.
The unit was "fully integrated in our review of the events of May 6 and will recommend appropriate action" if violations were found, Schapiro told a House Financial Services subcommittee yesterday.
"A number of subpoenas" were sent, she said, without saying to whom.
SEC investigators began preparing for a variety of inquiries in the hours after the Dow Jones Industrial Average briefly dropped as much as 9.2 per cent, people familiar with the matter said last week.
Commodity Futures Trading Commission Chairman Gary Gensler said one trader's sales of index futures accounted for nine per cent of the volume during the plunge.
Regulators haven't found evidence the incident was triggered by hackers, terrorists, malicious traders or a so-called "fat finger" entering an oversized order, Schapiro told lawmakers.
The SEC indicated it was also concerned that firms or exchanges may have lacked required controls to prevent the rout from snowballing, people familiar with the matter said.
The SEC said it would also look at whether traders tried to take advantage of the chaos with steps such as entering orders that drove down some stocks.
"We may learn that the extraordinary disruption in trading, however it may have been triggered, was the result of a confluence of events which, taken together, exacerbated what already had been a down day," Schapiro said.
"We are not prepared at this time to draw that conclusion."
Though regulators and exchanges dispelled rumours about what caused stocks to plunge, there were no firm conclusions about what did, Schapiro said.
