Technical Glitches at Brokerages: Trading Disrupted During Market Crash

Several notable brokerages, including Charles Schwab, Vanguard, and Fidelity, struggled with disruptions to their trading platforms on Monday, rendering numerous retail investors unable to act during one of the sharpest market corrections in recent years. The S&P 500 and Nasdaq indices suffered a significant decline, driven by substantial losses in major technology stocks such as Nvidia, which temporarily fell by 15 percent before partially recovering. According to DownDetector.com, a platform for reporting online service interruptions, customers of the brokerages began reporting outages at 9:30 AM ET. None of the affected firms could immediately identify the causes of the technical issues or confirm their duration. Historically, brokerages have repeatedly faced outages on days of high market volatility when large numbers of customers storm online platforms. As late as 11:30 AM, Schwab had a red warning banner on its website stating: 'Due to a technical issue, some clients may have difficulty logging in to Schwab platforms and reaching us by phone.' On social media, particularly in the WallStreetBets forum on Reddit with 16 million members, retail investors discussed the turbulent markets. A user posted a screenshot of his Fidelity account showing the losses he had incurred, while other members asked how he had access to his account while they themselves were locked out. Another user complained about the site's slowness during trading. By 11 AM, access to Fidelity was restored. Schwab stated in a release: 'A technical issue affecting some clients has been resolved. We apologize for the inconvenience.' Vanguard did not immediately respond to requests for comments. A spokesperson for Fidelity said that the company had 'urgently' addressed the issue and the situation was now resolved. In the past, brokerage platforms have frequently struggled with outages during hectic markets. In March 2020, the Robinhood platform failed due to 'unprecedented' trading activity, preventing transactions on two of the most volatile days since the financial crisis. Vanguard also reported outages on busy trading days. Technical glitches have also had repercussions: In 2021, Robinhood was fined approximately $70 million by the Financial Industry Regulatory Authority after the agency found that the outages had significantly disadvantaged investors. An insider at Robinhood confirmed that the company's trading platform was operational since the market opened on Monday morning but was affected by canceled trades through Blue Ocean Alternative Trading Systems. Blue Ocean offers extended trading hours for US stocks and certain ETFs. Robinhood notes on its website that Blue Ocean imposes price limitations and may restrict trading in individual securities when they exceed certain price bounds. Blue Ocean did not immediately respond to a request for comment. The technical outages are the latest disruptions for investors, occurring just weeks after widespread issues at global IT service provider CrowdStrike, which affected millions of computers due to a faulty update.