Knight Capital teeters after $440 million loss
By The Week Staff | August 2, 2012
K
night Capital was on the verge of going under on Thursday, after a computer trading glitch the previous day led to a whopping $440 million in losses for the brokerage firm. Knight was left scrambling for funds as its biggest clients, including TD Ameritrade and Fidelity Investments, said they were taking their business elsewhere. The problems started for Knight when an errant computer program executed a flurry of trades that sent some of the biggest stocks on the New York Stock Exchange on a wild ride, and forced the exchange to halt trading. It's not the first time that computers have wreaked havoc on the markets, raising concerns that they pose a systemic risk to the financial system.
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