The way the stock exchanges are set up, they can cancel trades that are considered "erroneous". It's in the contract, and it has been done before. Either part

The way the stock exchanges are set up, they can cancel trades that are considered "erroneous". It's in the contract, and it has been done before. Either party can trigger a mediation attempt [1], but in this case the exchange itself determined that they made a mistake in generating trades that shouldn't have actually happened and was only triggered by a glitch in the system, and made a blanket declaration. Since any trade on their system is actually just a contract to exchange the stock in the next 3 days, they don't have to take back any stock, they just have to declare the contract as invalid. Last I heard, the Nasdaq was going to cancel any trades that were during the glitchy time window and were more than 60% away from a baseline price (an amount people were "willing to pay for it" when the system wasn't glitching). I don't know how they came up with the number, nor how deeply the SEC and other agencies were involved in setting it. There will still be plenty of winners and losers coming out of this, just not the ones who thought they bought or sold Accenture at a penny. I'm not saying this is a "good" fix, but it is well within the Nasdaq's authority. [1] http://news.ycombinator.com/item?id=1325574 http://news.ycombinator.com/item?id=1325574 - notes that broken trades are fairly common, and that they're usually quickly mediated