As a result of its spectacular tech fail on Aug. 1, Knight Capital became the latest financial services firm to have pushed to the brink of collapse before being either rescued at the eleventh hour or permanently wiped out.
August 10, 2012
Knight Capital
Shortly before markets opened on Aug. 1, 2012, Knight was regarded as a powerhouse in electronic market making. A few minutes later, the firm’s new trading algo went rogue, giving rise to a crazed, 45-minute buying spree that at one point led Knight to hold an astounding $7 billion in stocks. The fiasco eventually left the firm with a $440 million loss. Three days later, Knight negotiated a loan and a lifeline thanks to a group of six firms, including Jefferies Group, TD Ameritrade Holding and Stifel Financial.
[Was Knight’s Fiasco Really a Wall Street Success Story?]
