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BATS out of hell

Chairman of troubled stock exchange stripped of title, but stays on as CEO.

Following on from its disastrous flash-crash on Friday, the chairman of the BATS stock exchange, Joe Ratterman, has been stripped of his title. The exchange saw the value of its own listing plummeting from from $16 to $0.04 in just 900 milliseconds on the day of its initial public offering (IPO), due to a "serious technical failure" which also affected every other stock beginning with A or B on the exchange (including Apple, stock code AAPL).

As well as strip him of the chairman role, however, the BATS board released a statement defending Ratterman and allowing him to keep the title of CEO, saying:

Joe continues to do a tremendous job as CEO of BATS, leading an organization which now operates the third-largest stock exchange in the U.S., Europe’s largest stock market and a growing U.S. options exchange. We fully support his leadership, vision and strategic direction as BATS continues to enhance competition and foster innovation in markets worldwide.

Some board members lost a great deal from the failure of the exchange; Lehman Brothers was once BATS' largest shareholder, and their creditors were hoping to make $48m from the IPO. If they'd sold a second too late, that would have fallen to just $120,000.

Meanwhile, the investigation into what exactly happened continues, both in official channels and online. Zerohedge makes a pretty strong allegation:

What happened is that malicious, 100% intentional Nasdaq algorithm purposefully brought BATS stock to a price of 0.00 within 900 millisecond of the company's break for trading! This is open SkyNet warfare.

Zerohedge claim that, although the fallout that affected all of the other stocks on the exchange was indeed accidental, the actual crash in value of BATS stock was done on purpose by an algorithm trading from within the Nasdaq network. It all gets a bit conspiracy-theorist from there, but it is true that for the algorithm to have done what it did by accident would be a remarkeable coincidence indeed.

Whether it was a software error or a malicious automatic trader, though, the wider outcome remains the same; the image of machine trading is at an all-time low, and any time something like this happens, it pushes it lower still.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Labour tensions boil over at fractious MPs' meeting

Corbyn supporters and critics clash over fiscal charter U-turn and new group Momentum. 

"A total fucking shambles". That was the verdict of the usually emollient Ben Bradshaw as he left tonight's Parliamentary Labour Party meeting. His words were echoed by MPs from all wings of the party. "I've never seen anything like it," one shadow minister told me. In commitee room 14 of the House of Commons, tensions within the party - over the U-turn on George Osborne's fiscal charter and new Corbynite group Momentum - erupted. 

After a short speech by Jeremy Corbyn, shadow chancellor John McDonnell sought to explain his decision to oppose Osborne's fiscal charter (having supported it just two weeks ago). He cited the change in global economic conditions and the refusal to allow Labour to table an amendment. McDonnell also vowed to assist colleagues in Scotland in challenging the SNP anti-austerity claims. But MPs were left unimpressed. "I don't think I've ever heard a weaker round of applause at the PLP than the one John McDonnell just got," one told me. MPs believe that McDonnell's U-turn was due to his failure to realise that the fiscal charter mandated an absolute budget surplus (leaving no room to borrow to invest), rather than merely a current budget surplus. "A huge joke" was how a furious John Mann described it. He and others were outraged by the lack of consultation over the move. "At 1:45pm he [McDonnell] said he was considering our position and would consult with the PLP and the shadow cabinet," one MP told me. "Then he announces it before 6pm PLP and tomorow's shadow cabinet." 

When former shadow cabinet minister Mary Creagh asked Corbyn about the new group Momentum, which some fear could be used as a vehicle to deselect critical MPs (receiving what was described as a weak response), Richard Burgon, one of the body's directors, offered a lengthy defence and was, one MP said, "just humiliated". He added: "It looked at one point like they weren't even going to let him finish. As the fractious exchanges were overheard by journalists outside, Emily Thornberry appealed to colleagues to stop texting hacks and keep their voices down (within earshot of all). 

After a calmer conference than most expected, tonight's meeting was evidence of how great the tensions within Labour remain. Veteran MPs described it as the worst PLP gathering for 30 years. The fear for all MPs is that they have the potential to get even worse. 

George Eaton is political editor of the New Statesman.