By Vicki Needham - 05/07/10 10:24 PM EDT
Two Democratic Senators are calling for federal regulators to report to Congress on the cause of the sudden stock market crash on Thursday.
Sens. Ted Kaufman (D-Del.) and Mark Warner (D-Va.) asked for an addition to the financial regulatory reform bill that calls for the Securities and Exchange Commission and the Commodity Futures Trading Commission to investigate and report what happened on May 6, according to a release and letter to Senate Banking Chairman Chris Dodd (D-Conn.) on Friday.
"A temporary $1 trillion drop in market value is an unacceptable consequence of a software glitch," the Senators wrote in the letter requesting their directive be added to the manager's amendment.
"We are concerned that as markets rely on and entrust such a high percentage of the capital management of the market to black-box trading system that systemic problems may be created," they wrote.
Meanwhile, the SEC and CFTC said they "are continuing to review the unusual trading activity that took place briefly" Thursday afternoon "to pinpoint its cause and contributing factors.
The Dow Jones Industrial Average plunged more than 1,000 points and fell briefly below the 10,000 mark on what analysts said were caused by riots in Greece over economic problems.
SEC and CFTC officials said they're talking to other financial regulators and foreign counterparts.
"We are scrutinizing the extent to which disparate trading conventions and rules across various markets may have contributed to the spike in volatility," they said in a release.
"Thursday's unusual trading activity included extreme volatility for a number of individual securities," they said. "This is inconsistent with the effective functioning of our capital markets and we will make whatever structural or other changes are needed."