Posted on 05/14/2010 9:30:55 PM PDT by TigerLikesRooster
Waddell & Reed responds to 'flash crash' reports
By Ben Rooney, staff reporter May 14, 2010: 4:30 PM ET
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In a statement, Waddell said it was one of possibly 250 other investors trading the E-mini futures contract on the day in question.
"On May 6, as on many trading days, Waddell & Reed executed several trading strategies, including index futures contracts, as part of the normal operation of our flexible portfolio funds," the firm said in a statement.
Waddell added that such trades are used to protect investors from potential losses, adding that the firm is a "'bona fide hedger' and not someone intending to disrupt the markets."
"This is a longstanding and well-monitored practice in certain of our investment portfolios," said Waddell.
Waddell (WAD) shares fell 5% to $32.38 Friday.
Gary Gensler, chairman of the Commodity Futures Trading Commission, said in congressional testimony Tuesday that regulators were focusing on one particular trader in the market for E-mini futures as part of the commission's investigation into the flash crash.
Gensler said the trader in question entered the market at around 2:32 p.m. ET on May 6 and finished trading by around 2:51 p.m. ET. He said this trader and others had executed hedging strategies of similar size previously.
A spokesman for the CFTC said the agency has no comment on the report.
(Excerpt) Read more at money.cnn.com ...
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