(Yicai Global) Oct. 29 -- Trading on China's mainland stock markets was severely disrupted yesterday morning when a major trading software crashed, prompting the country’s securities regulator to issue the developer Hithink Royalflush Information Network with a warning.

Straight Flush, which serves 573 million investors, went down for about one hour yesterday causing significant market disruption, Hithink said yesterday. The Hangzhou-based company gave no explanation for the system failure.

A large number of investors said on their Twitter-like Weibo accounts yesterday that they could not log into their accounts to check the status of their investments and the latest news. The breakdown caused them significant losses and they are seeking compensation from Hithink, they said.

The company responded an hour and a half after markets opened yesterday to say that the Straight Flush app had been restored, but did not comment on the requests for reimbursement.

Whether the app users can receive compensation depends on the reasons for the system failure, China Securities Journal reported, citing Zhu Sha, partner at Kinding Law Firm. If Straight Flush was taking the necessary measures to protect against such a collapse, then it should not be liable for the losses. But if the system malfunction was due to its own negligence, then it should.

Whether regulators will push the matter further and punish Hithink remains unclear.

Hithink’s share price [SHE:300033] closed up 1.26 percent today at CNY112.81 (USD18) giving it a market capitalization of CNY60.3 billion (USD9.4 billion).

Editor: Kim Taylor