A trading firm's use of a computer sell order triggered the May 6 market plunge, which sent the Dow Jones industrial average dropping nearly 1,000 points in less than a half-hour.
A report issued Friday by the Securities and Exchange Commission and the Commodity Futures Trading Commission determined the so-called "flash crash" was caused when the trading firm executed a computerized selling program in an already stressed market.
That led market players to swiftly pull their money from the stock market.
The report does not name the trading firm, but a person with direct knowledge of the investigation said the firm is Waddell & Reed, based in Shawnee Mission, Kan. The person spoke on condition of anonymity, because he was not authorized to identify the firm.
The free fall highlighted the growing complexity and diversity of the fast-evolving securities markets.
Sleek electronic trading platforms now compete with the traditional exchanges, with stocks now traded on some 50 exchanges beyond the New York Stock Exchange and the Nasdaq Stock Market.
Powerful computers give so-called "high frequency" traders a split-second edge in buying or selling stocks — based on mathematical formulas.
The risk looms that electronic errors at high speeds could ripple through markets and disrupt them.