Charles Schwab, Vanguard, Robinhood outages triggered by Apple, Tesla splits

The Robinhood application is displayed in the App Store on an Apple Inc. iPhone in an arranged photograph taken in Washington, D.C., U.S., on Friday, Dec. 14, 2018. The Securities Investor Protection Corp. said a new checking account from Robinhood Financial LLC raises red flags and that the deposited funds may not be eligible for protection. Photographer: Andrew Harrer/Bloomberg
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It was an alarming series of breakdowns that baffled traders: As two of the most popular stocks split at the start of the week, thousands of U.S. retail investors couldn’t use their brokerage accounts.

Increased trading precipitated by Apple and Tesla share splits contributed to problems at Robinhood and Charles Schwab when markets opened on Monday, according to people familiar with the matter. Retail clients of Vanguard, TD Ameritrade and Fidelity also experienced disruptions.

Schwab, Vanguard and other brokers resolve online glitches
Firms had problems related to equities, options and cryptocurrency trading as well as slow websites and mobile apps.

While most of the issues were resolved by midday, the interruptions sent a shudder across Wall Street, where professionals have come to rely on the zeal of individual traders to propel a wildly volatile year.

Robinhood experienced a technical problem that caused delays to customer order status updates, though it didn’t face a system-wide outage, a spokeswoman says. Heavy traffic from Apple and Tesla’s corporate actions exacerbated the challenges, according to one of the people familiar with the matter.

Schwab made a change to the storage systems it uses to display price quotes, says spokeswoman Mayura Hooper. That clashed with Monday’s heightened volumes around the splits and touched off an error, another person familiar with the matter says. The issue wasn’t overall capacity, Hooper says.

“We have handled far greater volumes than we experienced on Monday as demonstrated by our site performance, which is at over 99.9% for the year,” Hooper says.

Fidelity did not respond to a request for comment. A Vanguard spokeswoman says the company has no reason to believe that the stock splits caused the glitch, declining to provide further details. A TD Ameritrade spokeswoman says problems on its site and app on Monday were “completely unrelated” to Apple and Tesla’s corporate actions.

Retail traders have made a roaring return to the stock market in 2020, as people with more spare time because of the COVID-19 pandemic are trading shares and options as they seek to profit from dislocations across the global economy. The online brokerages have enjoyed record sign-ups and trading activity as a result.

Among the market’s darlings are Apple, which split its shares 4-for-1, while Tesla’s split was 5-for-1. Though total trading volume increased in both stocks that day, neither hit record volumes in a year of extreme volatility.

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