Knight Capital Group Inc. fought for survival on Thursday after
a $440 million trading loss caused by a software glitch wiped out much of its
capital, forcing Knight to seek new funding as its shares plunged almost 80
percent in two days, the Chicago Trib tells us.
Many of the company's biggest customers, including TD
Ameritrade, the No. 1 U.S. retail brokerage by trading volume, and fund giants
Vanguard and Fidelity Investments, stopped routing orders through Knight. One
of the biggest fears is that the company will collapse, landing trading
partners with losses.
"They have about 48 hours to shore up confidence,"
said James Koutoulas, head of an advocacy group for former customers of failed
brokerages MF Global and Peregrine Financial.
Knight said it is "actively pursuing its strategic and
financing alternatives," raising the likelihood the firm will be sold or
face bankruptcy because of the loss and subsequent damage to business….
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