Tai declines to say whether he believes the BATS IPO was intentionally brought down by a bad algo, and says there are less conspiratorial reasons for the price to fall so quickly. Tai explains a coding error which creates a "loop effect" that would match a buyer and seller quickly could force prices to the bottom.

But in order for those scenarios to work, Tai explains, there would need to be someone on the same side of the trade with the same intent of hitting any price. "The other seller would have had the same glitch that says 'size or price doesn't matter, make it an immediate or cancel order and then fire!'" Tai says.

Hunsader also argues that the nature of the trades reveal that it wasn't a rogue retail trader, but a firm tied to the market's framework.

"They were intermarket sweep orders hitting the bids, so that narrows it down to an audience of professionals" Hunsader says. "You have to be a broker/dealer or somebody connected to the exchange in order to tag the order ISO. This algorithm was easy to spot, because the other exchanges, for whatever reason, were not posting quotes."

Hunsader declines to name any possible trigger men for the BATS hit. "All that is for certain is that it was someone executing at Nasdaq," he says.

And there are culprits that may never be caught. There is no way for regulators or Wall Street to prove there was a trade sent out to intentionally bring down the BATS IPO, says AITE's Tai.

"These machines are flashing out orders in rapid-fire fashion in tiny 100-share orders. So it would take a very fast computer to catch it. And if you try and look at it with your own eye on the screen, you will never see it. They will be gone before you even blink. Regulators don't yet have the experience, the resources or technology to follow this."

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