New York City trading firm Knight Capital Group, Inc. said Thursday that a technical glitch at the open of trading on the New York Stock Exchange (NYSE) Wednesday has caused a US$440 million loss at the firm and sent it looking to shore up its capital.
Knight said that faulty installation of trading software resulted in the firm sending numerous erroneous orders in NYSE-listed securities into the market. It has now traded out of its entire erroneous position, which has resulted in a realized pre-tax loss of approximately US$440 million, it said.
“Although the company’s capital base has been severely impacted, the company’s broker/dealer subsidiaries are in full compliance with their net capital requirements,” it says, adding that it is now actively pursuing “strategic and financing alternatives to strengthen its capital base.”
The offending software has been removed from the company’s systems, it notes, adding that its clients were not negatively affected by the erroneous orders, and the software issue was limited to the routing of certain listed stocks to the NYSE.