SEC chairman says anxiety over ‘flash crash’ may have contributed to recent investor exodus

Schapiro: Anxiety on plunge may have fueled exodus

WASHINGTON — The head of the Securities and Exchange Commission says anxiety over the “flash crash” on Wall Street on May 6 may have contributed to the withdrawal of retail investors from the stock market in recent months.

SEC Chairwoman Mary Schapiro says the regulator has received written comments from brokerage firms saying their retail customers have pulled back from the market since the May 6 plunge. Many individual investors filed comments that are sharply critical of the current structure of the market, says Schapiro in prepared text for a speech Tuesday.

Schapiro acknowledges there could be many reasons for investors withdrawing from the market. But she says the issue is troubling, especially if investors’ concerns about the market in the wake of the plunge “are playing even a small role in investor decision-making.”