US online brokerages saw execution problems and outages Monday under weight of market mayhem

A number of the leading online brokerages in the US – including TD Ameritrade, Vanguard, Scottrade and Fidelity – apparently had some technical problems handling and executing client orders during Monday’s very turbulent trading session.

Monday of course began with a 1,000 point drop in the Dow Jones Industrial Average, which recovered somewhat throughout the day to close down 588 points.

It is unclear if some of the same problems continued into Tuesday, which saw another huge (4%+) intraday swing in the equity markets.
Worst hit were clients of TD Ameritrade, a subsidiary of Canada’s Toronto-Dominion Bank (TSE:TD). TD Ameritrade customers were apparently unable to access their accounts or execute trades for a stretch during Monday morning’s sell-off. The disruption led TD Ameritrade executives to huddle long into the night Monday, mapping out a strategy to ensure their systems performed flawlessly when the markets opened Tuesday. The brokerage appeared to operate without incident Tuesday.

TD AmeritradeTD Ameritrade chief strategist and managing director Joe Kinahan was quoted as reported as saying that the company is taking action to bolster its trading systems given what happened.

Other firms experiencing issues included Vanguard, Scottrade and Fidelity. A Vanguard spokesperson sent an email stating that the company had added capacity after experiencing ‘a brief period of sporadic website inaccessibility at the start of the trading day.’

Scottrade reported that its systems briefly suffered some initial slowness. And Fidelity said a small number of customers experienced trading delays.

There were no reports of outages or similar problems at other leading US online brokers such as E*TRADE Financial Corp (NASDAQ:ETFC) and Charles Schwab Corp (NYSE:SCHW).

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