After expensive software breakdown: stock exchange unlucky Knight Capital rescued


A group of investors provide $ 400 million, said the stock trader on Monday. As a consequence, however, existing shareholders are likely to lose control of the company. For the money there is debt, which can be converted into approximately 267 million shares. This means that investors will later hold just under three quarters of the shares.

Knight Capital had accumulated a huge $ 440 million loss in just 45 minutes last wednesday. Debt was a software breakdown: a new trading program flooded the market with erroneous trading orders. As a result, Knight Capital was sitting on a mountain of over-bought stocks and had to record the high loss.

The head of the powerful Securities and Exchange Commission, Mary Shapiro, called the incident "unacceptable". The case intensifies concerns about the impact of computer systems on stock markets. As a consequence, work on a monitoring system for trading programs is to be accelerated. (Dpa / tc)