Waddell & Reed Financial on Friday said it didn’t intend to disrupt markets on May 6 when the plunge in stocks temporarily erased more than $1 trillion of value.
Waddell & Reed traded index futures contracts as “part of the normal operation” of its funds, according to a statement from the mutual fund manager. The firm said it believes it was among more than 250 firms that traded “e-mini” contracts during the time the market sold off.
The U.S. stock market, fueled by computer-driven trading on May 6, had its biggest intraday decline since the crash of October 1987.
Gary Gensler, chairman of the Commodity Futures Trading Commission, had said previously that one sale was responsible for about 9% of the day’s volume in e-minis.
Comments by the CFTC and other regulators “indicate that we are a ‘bona fide hedger’ and not someone intending to disrupt the markets,” according to Waddell & Reed’s statement. “Like many market participants, Waddell & Reed was affected negatively by the market activity of May 6.”