Automatic Data Processing Inc. (ADP), one of the largest processors of electronic securities transactions for brokerages, suffered a computer crash last Friday that temporarily left customers of at least two companies unable to get online updates showing the cost of the trades they were making.
One of the affected brokerages, New York-based Quick & Reilly Inc., said its customers also couldn't get automatic confirmations of their trades as they were processed by ADP's system. That forced Quick & Reilly to keep staffers working through the weekend to manually issue confirmations and billing information to customers.
Officials at Roseland, N.J.-based ADP, which claims to process 25% of the online stock trades in North America, didn't return several phone calls today seeking comment on the incident. But both Quick & Reilly and TD Waterhouse Group Inc. in New York said their brokerage clients were hit by problems with a system that caused ADP to lose its ability to match buy and sell orders to the appropriate transactions.
The crash of the so-called order match system didn't affect the ability of investors to make trades, said Quick & Reilly spokesman Charles Salmans. And, he added, the problem was corrected after the stock markets closed, when ADP began redirecting incoming trades to a backup system.
But before that happened, Salmans said, users of Quick & Reilly's Web site couldn't receive automatic online updates showing the status and cost of their trades. About 25,000 of Quick & Reilly's 1.3 million online customers enter electronic transactions each day, according to Salmans.
For Friday's trades, all of the confirmations are having to be prepared manually by Quick & Reilly's staff -- a process that still hadn't been completed earlier today. About 10% of the customers who processed online trades Friday had yet to receive their confirmations despite the company's work over the weekend, Salmans said.
Melissa Gitter, a spokeswoman for TD Waterhouse, said that brokerage's online clients were able to receive confirmations of their Friday trades via the Web but couldn't get information on the cost of the transactions. However, all of the trades "were executed in a timely fashion" despite the problems, she said.
ADP's trading systems were once again operating normally today, Gitter added. She noted that ADP "is probably the biggest back-office [transaction processing] provider on the street." For example, ADP's Web site says that the company processes an average of more than 1.2 million online trades daily for its brokerage clients.
One Quick & Reilly customer, who asked to remain anonymous, today said the problems left him unnerved when he was unable to confirm his trading activities on Friday.
"It's worrisome as a customer," said the user, who still hadn't received confirmation of his trades as of this morning. "People don't like it when their stuff doesn't work. That's the kind of thing you lose customers over."