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JPMorgan Trading Platform for Rich Clients Froze During Rout

Sridhar Natarajan and Michelle F. Davis

(Bloomberg) -- JPMorgan Chase & Co.’s wealthy clients suddenly found themselves shut out from trading at the height of this week’s drama in stock markets -- just as prices cratered into the worst rout since 1987.

An electronic-trading platform used for catering to wealth-management clients broke down Thursday afternoon as the Dow tumbled by roughly 1,600 points, ending in a historic 10% drop, according to people with knowledge of the matter. The outage hit the group’s Morcom electronic trading platform, which employees use to place orders on behalf of wealthy clients, the people said, asking not to be named because the information isn’t public.

The system was overwhelmed by unprecedented volume, one person said. Brokers received instructions to reroute orders for cash equities and derivatives trades through manual means such as so-called paper tickets, according to a message seen by Bloomberg. The outage began mid-afternoon and was fully resolved after regular market hours. It worked smoothly Friday, one person said.

“Most of yesterday’s trades went through, and we’re working with clients to rectify any individual instances where trades were delayed,” said JPMorgan spokeswoman Jennifer Zuccarelli, confirming that a disruption occurred.

It’s the second high-profile breakdown of a popular U.S. platform during the recent tumult in markets. Robinhood Markets Inc., an online brokerage used by retail traders, has repeatedly gone dark, including an outage on March 2 that spanned an entire U.S. trading session. JPMorgan’s You Invest online trading platform, which competes with Robinhood, wasn’t affected, the company said.

Morcom is used by workers in JPMorgan Securities, the brokerage that serves high-net-worth and ultra-high-net-worth clients, as well as Chase Wealth Management, which serves affluent customers.

(Updates with You Invest not being affected in penultimate paragraph)

To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Michelle F. Davis in New York at mdavis194@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Dan Reichl

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