22. Scapegoat

The Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) issued its long-awaited report on the Flash Crash on Friday, October 1, 2010, and it landed with a thud. Titled “Findings Regarding the Market Events of May 6, 2010” and subtitled “Report of the Staffs of the CFTC and SEC to the Joint Advisory Commission on Regulatory Issues,” its explanation of the crash in the executive summary heaped blame on one party while ladling gentle teaspoons of blame on others who were far more culpable. Few news reports got beyond these opening pages, so their stories uncritically repeated the slanted story that a single large and reckless trade by a “mutual fund complex” had been the event that triggered the ...

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