No evidence of system malfunction in flash crash: CFTC

More than two weeks after the Dow Jones industrial average lost nearly 700 points in minutes before recovering, regulators and exchange operators are still searching for answers.

The CFTC official told a regulatory panel exploring the crash that the initial findings showed that the flash crash was not so much the cause of a single event but a confluence of events that led to the dislocation in liquidity.

The CFTC and the Securities and Exchange Commission have been analyzing the events of May 6 including the links between declines in prices of stock index products such as E-mini S&P futures contracts and the use of stop loss market orders.

The panel set up to advise regulators on emerging regulatory issues is made up of former and current regulators and other financial luminaries. It includes Nobel laureate economist Joseph Stiglitz and Richard Ketchum, the head of the Financial Industry Regulatory Authority, a regulator for more than 30 years.

Brooksley Born, who has been vindicated for trying to regulate the $615 trillion over-the-counter derivatives market when she was the chairman of the CFTC, also is on the panel.

(Reporting by Christopher Doering and Rachelle Younglai, editing by Dave Zimmerman)