Chinese regulators blame computer for stock frenzy

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Associated Press

Posted on August 18, 2013 at 7:04 AM

Updated Sunday, Aug 18 at 11:02 AM

BEIJING (AP) — Chinese regulators say a design flaw in a brokerage's computer system is to blame for a trading frenzy that caused stock prices to swing wildly last week.

The China Securities Regulatory Commission said Sunday it had concluded human error was not to blame for an avalanche of stock buying orders issued by Everbright Securities on Friday. They caused stock trading volume to spike up more than 50 percent above the previous day's level.

Instead, the agency said Everbright's stock-trading computer had flaws in systems that are meant to limit orders and prices.

Its statement Sunday gave no indication whether Everbright might face any penalties.

The orders Friday caused China's main market index to soar nearly 6 percent in three minutes before ending the day down 0.6 percent.

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