Knight Capital Group Inc. (NYSE:KCG) Appoints 3 Board Members In Wake Of Trading Fiasco
Knight Capital Group Inc. (NYSE:KCG) is a name that is very familiar on the lips of traders these days. The company has had one incident after another in recent months, which have caused them to bleed profit like a slashed artery. The Facebook Inc (NASDAQ:FB) IPO seems to have set off a chain of unfortunate events for Knight, as the most recent issue for the company was caused by a technical glitch in trading software.
The software, which was supposed to calculate when the most opportune moment to trade certain stocks had arrived, instead traded nearly 150 NYSE stock in a matter of 15 minutes. This simple malfunction cost Knight $440 million, and would have bankrupted the company, had there not been a groups of investors who saw the value in keeping them afloat.
Among the investors were Scottrade and TD Ameritrade Holding Corp. (NYSE:AMTD), who helped infuse funds into the bleeding company to keep them afloat.
Now, a report from Reuters states that Knight Capital Group Inc. (NYSE:KCG) has appointed 3 new members to its board of directors. The list of new personnel in the board room should come as no surprise to those who are familiar with Knight’s story this year.
The most prominent name, is perhaps, Fred Tomczyk, the CEO of TD Ameritrade Holding Corp. (NYSE:AMTD). This was the most notable company which came to Knight’s rescue when they were lying bruised and bleeding in the Street, and it’s only plausible that they want some of their leadership onboard, in order to protect their investment in the company. The other two members who were added, while not as prominent, are equally as talented in their respective areas. They are Martin Brand, of The Blackstone Group L.P (NYSE:BX), and Matthew Nimetz, of General Atlantic. It may be noted that Blackstone was also beneficial in Knight’s salvation, after the August 1st trade debacle.
This infusion of fresh blood to the board, has increased its membership role to 10 members. It’s reasonable to believe that this will offer some new views as to how trading should be handled by Knight. It comes at a time, which is most important to Knight’s survival. The $440 million in losses, which were incurred from the technical issues on the 1st of this month. It will be interesting to see how the changes in leadership affect the daily operations of the company in the near future.