Over-the-counter stocks hit trading glitch

Thousands of stocks stopped trading for more than five hours.
Posted By Sonali Basak   |   Nov. 8, 2013 at 12:32 PM  |  Updated Nov. 8, 2013 at 1:34 PM   |   0 comments

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(UPI) -- While the Twitter IPO was soaring in NYSE trading Thursday, New York-based OTC Markets Group Inc. hit a trading glitch. Thousands of stocks, including Fannie Mae and Freddie Mac, stopped trading for more than five hours.

Investor skepticism scaled after a series of technical hiccups since August, especially in Nasdaq trading, which holds top U.S. technology stocks. A Nasdaq glitch lasted for more than three hours in August.

While OTC Markets don't hold trades as significant as NYSE Euronext or Nasdaq, investors were "left in the dark" on thousands of unlisted trades. OTC stocks are generally smaller and more sparsely traded.

OTC Market trade volumes amount to about $1 billion compared with $227 billion on NYSE and Nasdaq.

The glitch comes at a day that Fannie Mae and Freddie Mac released soaring quarterly earnings, with Fannie Mae net income quadrupling compared with the same quarter last year. Fannie Mae stock inched one cent to $2.41 a share after trading resumed at 3 p.m.

Other stocks traded with OTC Markets include Nestlé S.A., Adidas AG and American Airline Parent Group, AMR Corp.

The technical issue was largely surrounding data transmissions. OTC Markets CEO R. Cromwell Coulson said the problem started at 6 a.m. with outages at service providers Lightower Fiber Networks.

OTC Markets paused trading before markets opened at 9:30 a.m., and the Financial Industry Regulatory Authority followed by halting all OTC Market trading until 3 p.m. The OTC Markets are reported as more lightly regulated than NYSE and Nasdaq.

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