SAN FRANCISCO (MarketWatch) -- Sen. Ted Kaufman, a Democrat from...

SAN FRANCISCO (MarketWatch) -- Sen. Ted Kaufman, a Democrat from Delaware, said the U.S. stock market's sharp, swift plunge on Thursday "must be carefully reviewed and placed within a meaningful regulatory framework soon." Kaufman, who has introduced an amendment to the bank reform bill that would require the Securities and Exchange Commission write rules creating a fiduciary standard for broker-dealers, said "the potential for giant high-speed computers to generate false trades and create market chaos reared its head again today."

The "battle of algorithms" is not understood or even "remotely transparent" to the SEC, he said in a statement. The SEC was reportedly talking with the heads of the major exchanges to see if erroneous trades were part of the nearly 1,000 point drop on the Dow Jones Industrial Average (INDU 10,520, -347.87, -3.20%) , and then its swift comeback to a 348-point loss. A SEC spokesperson declined to comment.

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