CFTC's Chilton Says Staff Eyeing Trading After Hoax

Commodity Futures Trading Commissioner Bart Chilton said agency officials are looking into trading that took place after the Tuesday Twitter hoax that sent markets careening sharply lower in a matter of minutes.

Mr. Chilton, a Democrat, told The Wall Street Journal that the CFTC is looking into the trading of 28 heavily traded futures contracts during a five-minute period after a false tweet from the Associated Press's Twitter feed said there were two explosions at the White House and President Barack Obama was injured. A group identifying itself as the Syrian Electronic Army claimed responsibility for the fake tweet.

AP quickly said the tweet was the result of an outside group's hack, but by then the market had already nosedived. Automatic trading systems had pulled back from trading or started selling as the decline accelerated, potentially turning what was a short-lived dip into a dramatic selloff that erased some $200 billion from the stock market.

A number of futures contracts also fell sharply, including the heavily traded E-mini contract, which is tied to the Standard & Poor's 500-stock index. The market snapped back within minutes, and stocks ended the day in the black.

The selloff "raises larger questions about how technology is used" in the market, Mr. Chilton said. "Somebody lost money, and not everybody who got out got back in."

The Securities and Exchange Commission is also looking into the event.

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