By Michael Baron, TheStreet
The unusual trading in Procter & Gamble (PG) stock believed to be at the center of the market's most volatile moments on Thursday is thought to have originated from Terra Nova Financial (TNFG), a Chicago-based provider of prime brokerage and clearing services, a person familiar with the situation told TheStreet.
Terra Nova issued a statement late Sunday saying it's "not aware of any link between Terra Nova and the unusual trading activity and wide market price changes" in P&G's stock. There is no indication of wrongdoing on Terra Nova's part at this time.
The exact circumstances of the trading action on Thursday are still unclear but sponsored direct-market access -- the practice of broker-dealers essentially leasing their credentials out to non-broker-dealer customers so they can trade directly with an exchange -- is said to have played a central role.
The Securities and Exchange Commission proposed a rule in January that would ban the practice, which is often referred to as "naked" or "unfiltered" access, and the potential for an erroneous trade to come through this way was addressed by the SEC when it proposed Rule 15c3-5 in January.
