Who Sold Short? Part 2

The Securities and Exchange Commission (SEC) reported that last May's almost 1000 point drop in the Dow Jones average and other indices was caused by a computer program that spawned a large sell order late in the day at a time when the markets were stressed. The SEC said that various factors were responsible for the crash. When I saw that this program executed at a time of market stress I had to think that there may have been manipulations of the markets (See Carpe HUNC of May 9, 2010). There was no mention of short selling on that day and and who may have profited from such a crash. I have smelled a rat and the stench grew. The SEC must start effectively policing these scoundrels and not white wash the whole affair.