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Flood of Day Traders Strains Online Brokers and the Backlash Is Swift

  • Interactive Brokers’ systems experienced severe outage Monday
  • It was the latest high-profile issue at a retail brokerage
RF trader

Photographer: Sarinya Pinngam/EyeEm/Getty Images

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The trouble began about 9 miles northwest of the New York Stock Exchange, in a squat, unremarkable building.

There, inside a critical data node in the U.S. financial system, a crucial piece of hardware failed. Like a downed electrical line in some faraway corner of the power grid, that breakdown effectively turned the lights out for a swath of investors across the nation. Irate traders woke up to discover they’d been locked out of their accounts at one of the nation’s leading electronic brokers, Interactive Brokers Group Inc.