TD Waterhouse Online System Crashes 2.52 p.m. ET (1852 GMT) September 3, 1999

NEW YORK  TD Waterhouse Group Inc. said Friday its trading system was down for nearly two hours, preventing the No. 3 U.S. online broker's one million-plus investors from trading stocks through its Web site.

A TD Waterhouse spokesman told Reuters the system crashed at about 10:30 a.m. EDT before going back up at about 12:15 p.m.

The spokesman said the crash occurred after Automatic Data Processing Inc., which routes buy and sell orders between the broker and the stock exchanges, suffered technical problems.

The crash is the second to be suffered by TD Waterhouse as a result of problems at Automatic Data.

On Sept. 10, 1998, similar problems knocked out TD Waterhouse's system as well as that of discount broker Quick & Reilly of Fleet Financial Group Inc.

System crashes have occurred from time to time among online brokers as the surge in users has often overwhelmed their networks.

John Hogan, president of Automatic Data's brokerage services group, blamed the glitch on a malfunctioning component in its operating system.

Hogan said his group serves about five or six online brokers, but he declined to identify them, or say whether they had the same problem as TD Waterhouse.

One frustrated investor with an account with TD Waterhouse said she still could not trade stocks after the time that the system was supposed to have gone back up.

"Part of it is still not functioning,'' said Lisa Bernfeld, a publicist in Los Angeles, Calif.

Shares in TD Waterhouse, which has about 1.9 million accounts in the United States, were off 1/16 at 14-7/8 in afternoon trade in New York.

Officials at Charles Schwab Corp., the No. 1 online broker, and AmeriTrade Holding Corp., the No. 6, said their systems did

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-- Homer Beanfang (Bats@inbellfry.com), September 03, 1999