CNBC: Trading Error at Major Firm Blamed For Selloff

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Trading Error at Major Firm Blamed For Selloff

On Thursday May 6, 2010, 4:16 pm

A human trading error at a major firm was the root cause of Thursday's sudden, 9 percent selloff in U.S. stocks, sources told CNBC.

Multiple sources said a trader entered the letter "b"-as in "billion"-when he or she meant to type "m," for "million," shortly before 2:47 p.m. New York time.

U.S. stocks plunged suddenly, briefly by more than 9 percent, before pulling back to a near 3 percent drop, as investor worries mounted that Greece's debt problems could spread.

Sources also told CNBC that the firm in question is Citigroup.

Citigroup (NYSE: c) said it has no evidence of a bad trade but it is investigating the situation.

The New York Stock Exchange reported there were no computer glitches in its systems Thursday.

Separately, Nasdaq said it was working with other major markets to review the market activity that occurred between 2:00 p.m. and 3:00 p.m.