Article Casts Doubt on Significance and Causes of Flash Crash
In their collaborative article in the latest issue of Nautilus, System Logic principal Chris Clearfield and University of California Professor James Owen Weatherall cast further doubt on the CFTC's claim that accused market manipulator Navinder Sarao contributed to the Flash Crash.
Clearfield and Weatherall argue that, in looking for a simple cause for the Flash Crash, regulators are asking the wrong question. From the regulators' perspective, "the Flash Crash was a fluke, an idiosyncratic event caused by an unexpected glitch in the markets." To the contrary, Clearfield and Weatherall say: "the Flash Crash reveals that we need a fundamentally different understanding of how modern financial markets work."