Knight Capital Group Inc.(NYSE:KCG), in a note sent to its clients, has said that it is conferring with experts outside to provide it additional help in the review of the incident last week where its trading software went awry.
In the middle of the trading week, market maker Knight Capital's trading software punched in wayward orders that sent prices wildly swinging and wiped out the company’s capital. The company sustained losses of $400 million, nearly four times of what the company earned in 2011.
How Should Investors React To The Firm’s Recent Turmoil, Get Free Report
Knight Capital's Chief Executive Thomas Joyce told his clients that safeguards had been put in place so that repeat of that incident does not occur.
In his note to clients Joyce wrote, "We are in discussions with external advisers in an effort to effectively assess the situation, in addition to our internal review."
Joyce also informed that after taxes the net loss to the company as a result of the episode would be of the order of $270 million.
On Thursday Knight Capital's shares, valued at $309 million, closed down 2.85 percent at $3.07 on the NYSE.
Dow Jones in its Market Watch section reported that a Knight spokeswoman confirmed the email but said that no decision had yet been taken regarding an outside firm coming in to review the technology problem.
That episode has sent jitters throughout the trading community, as they now start to worry about computer trading.
Should Investors Buy KGC Now? Get Trend Analysis
Knight Capital, a relatively low-profile firm which few investors had heard about before the trading glitch last week, is responsible for the trading of 524 NYSE-listed stocks.
It routes trades from larger brokerages such as Ameritrade and E-Trade.