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Securities and Exchange Commission

is digging deeper into the outages and delays at e-brokers that frustrate online traders so much.

In a letter sent last month to some large cyber brokers, including








, the SEC's

Office of Compliance, Inspections and Examinations

requests data about outages from January 1999 through the present, the firms said. Responses to the letter are due early this month.

Other large online brokers, including

Charles Schwab

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, couldn't immediately comment on whether they had received the letter.

An SEC spokeswoman declined comment.

Online brokers have spent millions of dollars trying to upgrade their systems to eliminate the outages that plagued the industry in its early days, when surges in trading routinely crashed their computers. But all that spending hasn't solved the problems, and scrutiny of the issue has been growing.

The SEC's attempt to measure the depth of systems outages comes on the back of a

General Accounting Office

report released in early June. That report, which had been requested by the

House Committee on Commerce

, called on the SEC to monitor brokers' records of online systems delays and outages. The commerce committee's interest followed a report from the

New York Attorney General's

office in November 1999, whose recommendations included calling for increased disclosure by online brokerages about slowdowns and outages. And the SEC itself began in early 1999 to increase its oversight of the online brokerages, particularly on capacity and disclosure issues.

For online traders, outages are serious issues. An inability to trade quickly can cost them real money, especially in volatile markets. So Internet-empowered retail investors have learned to complain loud and often about outages. For instance, when Schwab experienced outages at the stock market's open two days in a row recently, one investor told

that the tech problems cost her thousands of dollars. (


wrote about Schwab's recent problems.)

The SEC's move indicates that one of the problems with systems outages has been the inability to track them. While major outages are reported from time to time in the press, retail investors often say that they experience smaller outages on a much greater scale. The GAO found in its report that 11 out of the 12 broker-dealers it contacted had experienced 88 outages between January and September 1999. That's why it recommended that the broker-dealers with online trading systems not only keep consistent records on outages and delays, but also that they disclose the potential for such occurrences on their Web sites. In



survey of online investors earlier this year, reliability was the largest concern investors had about their brokers.

The likely goal of the SEC's request for data is to create a type of publicly available database in which investors would be able to see their brokers' records, says Michael Hogan, DLJdirect's general counsel. DLJdirect is a unit of

Donaldson Lufkin & Jenrette



One of the problems with fulfilling the GAO's recommendations is defining exactly what an outage or slowdown is and then gathering the data needed to determine them, Hogan said. For example, does an outage include problems with a telecommunications vendor or with the


? In addition, the rules need to apply to off-line brokers as well, he says. The

Securities Industry Association's

ad-hoc online-broker committee, which Hogan heads, expects to send a letter to the SEC in the next two weeks that addresses some of these points.

The SEC defines an outage in the letter, according to Hogan, as "any internal systems problem or systems problem of a vendor that affected 10% or more of a firm's active online customers and resulted in online trading systems services being unavailable or experiencing response times so delayed as to be substantially unavailable."

So even when it comes to online trading, identifying the problem may be the first step.