Waddell & Reed Financial Inc. reported strong earnings and little impact from the Flash Crash of May 6 - which the SEC and CFTC staffs say was triggered by a $4.1bn sale of futures contracts by traders with Waddell's Ivy Asset Strategy Fund.  Waddell executives played down the impact of scrutiny it's received over the events of May 6, which apparently was prompted by a trade using a computer algorithm. 

Business has continued more or less as usual under the spotlight for Waddell.  At 9/30, the company managed $76 billion in assets - its most ever at the end of a quarter - and net earnings increased during the quarter by 21%, to $40.5mn.  Waddell's Asset Strategy fund is one of a growing breed of "go-anywhere" funds that can invest not just in stocks, but also in gold and other commodities and even real estate. It also places big hedges designed to protect assets - moves that have raised its assets, but also questions.

"There's little effect that has been seen," Thomas Butch, an executive vice president of the firm who oversees sales of Waddell's popular Ivy Asset Strategy Fund and other retail and wholesale funds, told analysts on a call Tuesday. Traders with the Asset Strategy fund were responsible for the futures trade in question, which they intended as a hedge, or protection against losses, amid market turbulence.    [WSJ, 10/27]