Friday, August 3, 2012

Computer Glitch Loses Finance Firm Millions

A major US stock brokerage is close to collapse after an IT meltdown caused it to lose 75% of its share value.

Knight Capital made a trading loss of $440m (£283m) after the technology glitch affected the company's automated trading software.

US security regulators are investigating the system error, which caused Knight Capital to mistakenly trade in dozens of stocks on Wednesday.

The automated trading took place over 45 minutes, sending markets into chaos as prices fluctuated widely during that period.

In a statement the company said: "This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market.

"This software has been removed from the company's systems."

The dud trades flag up the potential pitfalls of sophisticated high-speed trading software, which dominates global stock markets.

In an attempt to survive the huge loss, Knight Capital is seeking investment or takeover bids, according to reports. Read More