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Flash Crash Could Happen Again: CFTC's Chilton

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Another 'flash crash' could happen, though it’s less likely now than it was on May 6, when the market plunged nearly 1,000 points before recovering, Bart Chilton, commissioner of the Commodity Futures Trading Commission (CFTC), told CNBC Friday.

Chilton said the markets are safer for investors today because of what he called “Band-Aids” to prevent a repeat of the flash crash.

The Securities and Exchange Commissionand the CFTC said in a report released Friday that the market plunge was caused when a trading firm executed a computerized selling program in a nervous market.

Chilton said the markets will be even more secure a year from now, once they have implemented more structural changes, some coming from the Dodd-Frank Act.

“Circuit breakers need to be harmonized,” said Chilton. “When stocks go up or down a certain percentage, there needs to be a timeout or a replenishment period for liquidity. We need to insure that there are price bans, so that, for example, Accenturecan’t go down the way it did that day—from 40 cents down to a penny. We need to have stop-gaps.”

Chilton described what happened on May 6 as a “massive trade in a skiddish market” that was executed so fast that it was “robotic.”

He said the situation would have been much worse had it happened while the European markets were still open.