Bloomberg News

Bulltick Says Erroneous Mexico Stock Trades May Be Voided

April 13, 2012

Late-day Mexican stock transactions involving Bulltick Capital Markets may be voided by exchange officials after a “technological error” sparked a plunge in the benchmark index, said Alejandro Creixell, a managing partner at the firm.

The IPC sank 2 percent in less than five minutes starting at about 2:45 p.m. local time today, before ending the day down 2.3 percent from yesterday at 38,444.01. Creixell, who has been discussing the matter with bourse officials, said it wasn’t clear whether the trades that drove down the index were caused by an error in Bulltick’s trading system or the stock exchange’s. Roberto Gavaldon, a bourse spokesman, didn’t respond to phone and e-mail messages seeking comment.

Bulltick executed more sell orders by volume than any other Mexican brokerage today. In the past month, it’s been the 19th most active seller, according to data compiled by Bloomberg.

“It was a technological error very similar to the flash crash” in the U.S., Creixell, head of Bulltick’s brokerage in Mexico City, said in a telephone interview.

The Dow Jones Industrial Average briefly lost almost 1,000 points in the so-called flash crash of May 2010, which spawned increased regulatory scrutiny for high-frequency traders, who use technology and complex computer programs to execute trade orders sometimes within milliseconds.

Arca Continental SAB (AC*), Mexico’s second-largest Coke bottler, sank as much as 14 percent in intraday trading today. Grupo Aeroportuario del Pacifico SAB, the operator of airports in the Pacific and central regions of Mexico, fell as much as 10 percent.

“All of a sudden the index started falling,” said Roberto Cavazos, who manages about 2 billion pesos ($152 million) in equities at Value Casa de Bolsa SA in Mexico City. “We started to look at different stocks and realized it was an error. There were very unusual trades from Bulltick -- big volumes and prices out of line with the market.”

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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