Knight Turns to IBM to Review Software

Knight Capital Group Inc. KCG -0.74% hired International Business Machines Corp.IBM +0.56% to review the software problems that led to last month’s $440 million loss last month, and soon plans to name a new chief risk officer, the brokerage firm’s chief executive officer said Tuesday.

Knight Turns to IBM to Review Software

Knight Turns to IBM to Review Software

IBM began its review Aug. 27 and is examining the Jersey City, N.J.-based firm’s processes for developing products, after an “undetected bug” in old software caused it to unleash millions of unintended trades on Aug. 1, Knight CEO Thomas Joyce told analysts and investors at the Barclays Global Financial Services Conference.

“In effect, we kicked the beehive,” he said of troubles Knight has blamed on improperly installed software. “We began generating orders unrestricted by volume caps.”

As was previously reported by The Wall Street Journal, the trades caused Knight to amass stock positions valued at some $7 billion during the Aug. 1 trading day. The resulting losses forced Knight to seek rescue financing in order to open for business the next day. That weekend, Knight raised $400 million in equity financing from new investors to remain in operation.

Read more

Advertisements

About yocijourney

God does not play dice
This entry was posted in Articles, Breaking News, Business, Finance, High Frequency Trading, Insider Trading, Regulatory Updates, SEC, The Wall Street Journal, U.S. Economy, World Economy and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s