Knight CEO Joyce says has full support of new investors
By John McCrank
NEW YORK (Reuters) - Knight Capital Group Inc Chief Executive Thomas Joyce said on Monday the group of investors that injected $400 million into the firm over the weekend to keep it afloat after a massive trading error last week fully supports his leadership and his management team.
Joyce said in an interview that he does not believe any market rules were broken on Wednesday when a software glitch caused Knight to make thousands of unintended trades on about 140 stocks, distorting the market and leading to a $440 million loss at the firm.
With Knight facing collapse, Blackstone Group LP, rival market maker Getco and financial services companies TD Ameritrade Holding Corp, Stifel Nicolaus, Jefferies Group Inc and Stephens Inc purchased preferred shares for what works out to be a 73 percent stake in the company.
"The new investors were very straightforward in supporting me and the management team," Joyce said.
It was too soon to say if Knight would have to downsize following the deal, he said.
"Over the last few days, we have not spent a lot of time on future strategy and how was are going to execute our future strategy. Right now we kind of like our footprint and we will continue to execute on the strategy we had before the error took place."
Knight was the largest U.S. provider of retail market-making in New York Stock Exchange and Nasdaq-listed stocks, buying and selling shares for clients. It also provides liquidity to equity markets by stepping in to buy and sell stocks, using its own capital to ensure orderly activity.
Shares of New Jersey-based Knight were down 24.2 percent at $3.07 on Monday afternoon. Last Tuesday the shares closed at $10.33.
(Reporting By John McCrank; Editing by Gerald E. McCormick)
© Thomson Reuters 2017 All rights reserved.