This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cohen Milstein Sellers & Toll PLLC Announces The Investigation Of Knight Capital Group, Inc.

Stocks in this article: KCG

Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Knight Capital Group, Inc. (“Knight Capital” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as state law.

A class action lawsuit was filed in the U.S. District Court for the Western District of Tennessee by another law firm on behalf of purchasers of the common stock of Knight Capital Group, Inc. (NYSE: KCG) between February 29, 2012 and August 1, 2012, inclusive (the “Class Period”).

The complaint alleges that Knight Capital and certain of its officers and directors (“Defendants”) misrepresented and/or failed to disclose that: (1) “[m]otivated by changes to NYSE Rules taking effect on August 1, 2012, Knight Capital knowingly introduced unproven electronic trading software packages into the NYSE that destabilized the global equity markets”; (2) Knight Capital knew or should have known that its new electronic trading technology had the potential to engage in large-volume erroneous trading because massive amounts of trades could be placed in seconds; and (3) as a result, when the technology was implemented, Knight Capital erroneously acquired a large volume of stock at unfavorable prices.

On August 1, the price of Knight Capital shares fell from $10.33 to $6.94 after it was reported that the Company had sent an e-mail advising its clients to route orders elsewhere, explaining that it had “experienced a technology issue” in its market-making unit “related to the routing of shares of approximately 150 stocks to the NYSE.” The following day, the Company publicly confirmed the “technology issue” which it said had resulted in a $440 million loss, stating in a press release:

This issue was related to Knight’s installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market…Knight has traded out of its entire erroneous trade position, which has resulted in a realized pre-tax loss of approximately $440 million. Although the company’s capital base has been severely impacted, the company’s broker/dealer subsidiaries are in full compliance with their net capital requirements. Knight will continue its trading and market making activities at the commencement of trading today. The company is actively pursuing its strategic and financing alternatives to strengthen its capital base.

The price of Knight Capital stock dropped from $6.94 to $2.58 on August 2 amid fears that the Company could be headed for bankruptcy.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs