FT.com / Markets / Insight - ‘Flash crash’ delivers clear messages

FT.com / Markets / Insight - ‘Flash crash’ delivers clear messages: "Equity markets in the US remain the largest and most liquid in the world, and during the 2008 crisis seemed to be the only segment of our financial system that functioned unimpaired. Yet in less than 20 minutes on May 6th, confidence in our market system was significantly damaged.
Hours after the market’s wild ride, thousands of trades on electronic exchanges were cancelled on a somewhat arbitrary basis, leaving investors questioning the integrity of the marketplace. What is more, the search for a cause has not revealed specific triggers, but instead highlighted challenges with the fragmented nature of US markets."

This is not the first time this has happened in the world. Australia's interest rates futures market had its own version of the flash crash on 25 July 2007 for very similar reasons. The court judgement on the case brought by some traders against the Sydney Futures Exchange who thought the cancellation of some trades was "on a somewhat arbitrary basis" will be delivered at 10:15 on 28 May 2010.