Though her agency has not yet determined what exactly caused May 6th's market disruption, SEC Chairman Mary L. Schapiro, testified on May 11 before the the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises of the United States House of Representatives Committee on Financial Services about the event and what the SEC plans to do about it. In her testimony, Schapiro characterized the May 6 event as the "sudden evaporation of meaningful prices for many major exchange-listed stocks in the middle of a trading day," and said that the event harmed confidence in the integrity of the financial markets.
Schapiro's testimony consists of an excellent chronology of what happened in the stock market on May 6; an overview of the current market structure for the U.S.-listed securities, including the national market system and Regulation NMS, the highly automated nature of trading in today’s markets, and the market-wide circuit breakers and other individual market “time out” mechanisms designed to address difficult trading conditions; as well as a discussion of various regulatory tools that need to be considered in determining how best to maintain fair and orderly financial markets and to prevent severe market disruptions in the future.
Regarding the cause of the market disruption, Schapiro testified that the SEC is working with the CFTC, FINRA, and the exchanges to determine what precipitated the event. Though no single cause obvious, Schapiro addressed some of the common reports and rumors that have circulated since May 6.
The full text of Chairman Schapiro's May 11 testimony is available at: http://www.sec.gov/news/testimony/2010/ts051110mls.pdf