CNBC's Mary Thompson has the latest details on how the firm's trading glitch is impacting its customers and employees.
By NBC News staff
Troubled Knight Capital has told brokers that it has obtained a line of credit, allowing it to operate for the day, according to a report on The Wall Street Journal?s website.
Representatives of the Jersey City, N.J., trading company, which said Thursday it lost $440 million in a glitch that affected the markets Wednesday morning, are calling trading-desk executives to encourage them to route trades to Knight as usual on Friday, the report said. The source of the credit line and other details of Knight?s financing are not clear, according to the newspaper.
After the trading glitch, which roiled the markets Wednesday, Knight said it was ?actively pursuing its strategic and financing alternatives to strengthen its capital base? in the wake of its big losses.
Knight is in talks to sell its futures brokerage unit with potential buyers, including Chicago-based R.J. O?Brien, according to a separate report on the New York Times? website.
U.S. Securities and Exchange Commission Chairman Mary Schapiro said on Friday that the technology problems that led Knight Capital Group Inc to suffer a $440 million trading loss are "unacceptable," and pledged to take additional steps to strengthen the integrity of the marketplace.
"The apparent trading error by Knight Capital Group on Wednesday reflects the type of event that can raise concerns for investors about our nation's equity markets - markets that I believe are the most resilient, efficient and robust in the world," Schapiro said in a statement.
Knight was forced to raise money after a ?technology issue? in its market-making unit was the cause of unusually high volatility in the markets Wednesday morning. The glitch affected the routing of shares of about 150 stocks to the New York Stock Exchange, Knight said.
Goldman Sachs has agreed to buy a block of stocks from Knight the day of its trading malfunction, CNBC reported, citing sources familiar with the matter.
Knight had inadvertently acquired the stocks on Wednesday due to a trading software error and Goldman agreed to buy the stocks from Knight after the close of trading that afternoon, CNBC reported, the people said.
Reuters contributed to this report.
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