“Knuckleheads” in IT Responsible for Errant Trading, Knight Capital CEO Claims
Market maker Knight Capital Group announced this week that it is taking steps to improve its operational risk management after an electronic trading glitch in August cost it $440 million in about 45 minutes. It initially blamed “old dormant software.” The losses forced the firm sell more than 70 percent of its preferred stock for $400 million in order to stay in business.
The Wall Street Journal reported that Knight’s CEO Thomas Joyce will be appointing a chief risk officer to oversee both market credit and operational risk issues. In addition, Joyce said that the firm hired IBM in late August to investigate its software development practices and processes and report its findings to the board later this autumn. [read more..]