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August 6, 2012

LA Times: Knight Capital Group hustling to find a buyer or secure funding

“Knight Capital Group lurched into the weekend with executives scrambling to find a buyer or secure emergency funding needed for survival.

The battered trading firm was said to be meeting with private equity investors and rival financial firms about putting together a deal. Knight has been left cash-strapped after a software glitch caused $440 million in losses from erroneous high-speed trades this week.

Dennis Kelleher, president of Better Markets, a nonprofit that advocates for tougher Wall Street regulation, said high-speed computerized trading is one of the biggest problems facing financial markets and regulators aren’t equipped to monitor it.

“This is not a glitch or a bug, this was a massive, computer-driven, wealth-destruction event that reveals how fragile the capital market structure in the United States has become and why investors are fleeing the markets like never before,” Kelleher said. “

Read the full LA Times story here

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