New York: Knight Capital Group Inc.’s $440 million trading loss stemmed from old computer software that was inadvertently reactivated when a new program was installed, according to two people briefed on the matter.
Once triggered on August 1, the dormant system started multiplying stock trades by one thousand, according to the people, who requested anonymity because the firm hasn’t commented publicly on what caused the error.
Knight’s staff looked through eight sets of software before determining what happened, the people said.“Whenever there’s software involved, there’s always a danger of something going wrong,” Sang Lee, managing partner at research firm Aite Group LLC in Boston, said in a phone interview.
Lee had no first-hand knowledge of Knight’s situation, he said. “It’s a risk everyone lives with, not just in the financial services world.”
