Statement for the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues
Charles Rotblut, representing the AAII, raised concerns about market volatility and lack of investor protections following the May 6, 2010 flash crash, but no fraud, charges, or financial penalties were alleged or described.
Charles Rotblut, CFA, testified on behalf of the American Association of Individual Investors (AAII) to a joint CFTC-SEC advisory committee, expressing widespread investor concerns about the May 6, 2010 flash crash. He highlighted fears over high-frequency trading, market makers allowing stocks to plummet to pennies, and the absence of safeguards to prevent future volatility. No fraud, financial losses, legal charges, or enforcement actions were mentioned—only calls for improved market structure and investor confidence.
Charles Rotblut, CFA and vice president of the American Association of Individual Investors (AAII), submitted testimony to a joint CFTC-SEC advisory committee on August 9, 2010, representing the concerns of approximately 150,000 individual investors. He emphasized that the primary impact of the May 6, 2010 flash crash was not financial loss but a collapse in investor confidence due to unexplained, extreme price volatility. Investors were confused about how complex algorithmic trading and market maker behavior allowed highly liquid stocks to drop to penny levels within seconds. Many questioned whether safeguards existed to prevent recurrence and whether stop orders could be executed reliably in such conditions. Rotblut noted that most AAII members trade online through discount brokers and possess intermediate investment knowledge, yet lacked understanding of the technological forces driving market movements. The testimony focused exclusively on systemic risks, investor education, and regulatory gaps—not on any specific fraud, misconduct, or financial penalties. No individuals, firms, or entities were accused of wrongdoing, and no legal charges, fines, or resolutions were discussed. The document served purely as an advocacy and informational statement urging improved market structure and protections for retail investors.
Extracted insights
- person charles rotblut
- person his commentary
- company investools, an investment education company
- The American Association of Individual Investors is a nonprofit organization
- AAII is comprised of approximately 150,000 individuals
- The typical member has an intermediate knowledge of investing
- The typical member holds an undergraduate or graduate degree
- The majority of AAII members trade online through a discount broker
- Many individual investors continue to have questions concerning the May 6 flash crash
- They are unsure about the procedures that caused stock prices to become so volatile
- They are worried that solutions have not been established to prevent similar events from occurring in the future
- They wonder about how much control over the movement of stock prices has been ceded to complex software programs that trade within milliseconds
- They don't understand how market makers could have allowed some highly liquid stocks to fall to a penny per share
- They are asking where the protections are for the individual investor
- The biggest impact of the flash crash was the effect it had on their confidence
- They are concerned that unusual volatility, such as the large price swings that transpired on May 6, could occur again
- They are worried about the possibility of a buy or sell order, especially a stop order, not being executed in an orderly fashion
- Charles Rotblut is a vice president of the American Association of Individual Investors
- He is the editor of the AAII Journal
- He authors the weekly AAII Investor Update e-newsletter
- His commentary is published on both Seeking Alpha and Forbes.com
- Charles has analyzed both publicly traded and privately held companies
- Charles has worked for Zacks Investment Research, an investment research firm
- Charles has worked for INVESTools, an investment education company
- Charles has worked for Curian Capital, a money management firm
- Charles has worked for McClure, Schumacher & Associates, a business valuation firm
- Charles is a graduate of the University of Kansas
- He earned a bachelor's degree in Journalism
- He is a holder of the right to use the Chartered Financial Analyst (CFA) designation
Statement for the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues By Charles Rotblut, CFA Vice President, American Association of Individual Investors August 9, 2010 The American Association of Individual Investors (AAII) is a nonprofit organization that provides investment education, information and resources. AAII is comprised of approximately 150,000 individuals. The typical member has an intermediate knowledge of investing and holds an undergraduate or graduate degree. The majority of AAII members trade online through a discount broker. Many individual investors continue to have questions concerning the May 6 "flash crash." They are unsure about the procedures that caused stock prices to become so volatile. They are worried that solutions have not been established to prevent similar events from occurring in the future. They wonder about how much control over the movement of stock prices has been ceded to complex software programs that trade within milliseconds. They don't understand how market makers could have allowed some highly liquid stocks to fall to a penny per share. Most importantly, they are asking where the protections are for the individual investor. The biggest impact of the flash crash, from the standpoint of the individual investor, was not the effect it had on their brokerage account balances, but rather the effect it had on their confidence. They are concerned that unusual volatility, such as the large price swings that transpired on May 6, could occur again. They are also worried about the possibility of a buy or sell order, especially a stop order, not being executed in an orderly fashion. Biography for Charles Rotblut: Charles Rotblut is a vice president of the American Association of Individual Investors. He is the editor of the AAII Journal. He authors the weekly AAII Investor Update e-newsletter and his commentary is published on both Seeking Alpha and Forbes.com. Charles' first book, “Better Good Than Lucky,” is expected to be published later this year. He has analyzed both publicly traded and privately held companies. Charles' experience includes working for Zacks Investment Research, an investment research firm; INVESTools, an investment education company; Curian Capital, a money management firm; and McClure, Schumacher & Associates, a business valuation firm. Charles is a graduate of the University of Kansas, where he earned a bachelor's degree in Journalism. He is a holder of the right to use the Chartered Financial Analyst (CFA) designation.
Statement for the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues By Charles Rotblut, CFA Vice President, American Association of Individual Investors August 9, 2010 The American Association of Individual Investors (AAII) is a nonprofit organization that provides investment education, information and resources. AAII is comprised of approximately 150,000 individuals. The typical member has an intermediate knowledge of investing and holds an undergraduate or graduate degree. The majority of AAII members trade online through a discount broker. Many individual investors continue to have questions concerning the May 6 "flash crash." They are unsure about the procedures that caused stock prices to become so volatile. They are worried that solutions have not been established to prevent similar events from occurring in the future. They wonder about how much control over the movement of stock prices has been ceded to complex software programs that trade within milliseconds. They don't understand how market makers could have allowed some highly liquid stocks to fall to a penny per share. Most importantly, they are asking where the protections are for the individual investor. The biggest impact of the flash crash, from the standpoint of the individual investor, was not the effect it had on their brokerage account balances, but rather the effect it had on their confidence. They are concerned that unusual volatility, such as the large price swings that transpired on May 6, could occur again. They are also worried about the possibility of a buy or sell order, especially a stop order, not being executed in an orderly fashion. Biography for Charles Rotblut: Charles Rotblut is a vice president of the American Association of Individual Investors. He is the editor of the AAII Journal. He authors the weekly AAII Investor Update e-newsletter and his commentary is published on both Seeking Alpha and Forbes.com. Charles' first book, “Better Good Than Lucky,” is expected to be published later this year. He has analyzed both publicly traded and privately held companies. Charles' experience includes working for Zacks Investment Research, an investment research firm; INVESTools, an investment education company; Curian Capital, a money management firm; and McClure, Schumacher & Associates, a business valuation firm. Charles is a graduate of the University of Kansas, where he earned a bachelor's degree in Journalism. He is a holder of the right to use the Chartered Financial Analyst (CFA) designation.