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How Knight Capital's 'Knightmare On Wall Street' Could Transform The Regulatory Landscape And Impact Investors And Speed Traders

Building off of the momentum of past conferences, Golden Networking brings back High Frequency Trading Leaders Forum 2012, now in New York, Chicago and London (

(August 20, 2012, New York) Reuters reports that U.S. regulators are working to figure out whether the trading snafu at Knight Capital Group that resulted in a $440 million loss and nearly destroyed the firm was exacerbated by a breakdown in risk management, according to a source familiar with the situation.

A team of U.S. Securities and Exchange Commission's trading and markets division staff and the Office of Compliance Inspections and Examinations are focused on trying to uncover what happened and whether the problem should have been caught, said the source, who declined to be identified because the individual is not allowed to talk to the press.

One of the questions being asked by the SEC is why there appeared to be a breakdown in controls. There was no single point person at Knight to deal with the problem when it occurred, leading to further confusion and extending the time it took to stop the flow, according to a second source.

A spokesman for the SEC declined to comment on the nature of the investigation, instead referencing an August 3 SEC statement on the matter that said there were rules in place that should have prevented the problem.

Knight's trading glitch was the result of old software that was somehow activated, unleashing a flood of errant trades into the stock market on August 1. The software problem at Knight caused the firm to buy and sell about 150 different stocks over 30 to 45 minutes, amassing a $7 billion position it later had to unload at a loss. How this could transform the regulatory landscape and impact investors and speed traders will be debated at upcoming High Frequency Trading Leaders Forum 2012, this time in three of the world's most important financial centers: New York, Chicago and London.

High Frequency Trading Leaders Forum 2012, How Knight Capital's 'Knightmare on Wall Street' Could Transform the Regulatory Landscape and Impact Investors, Speed Traders and Brokers", will provide attendees in New York, Chicago and London with the most up-to-date review of where this ever-changing industry stands and how new technology and regulatory developments will impact it. Recognized experts, regulators, and strategists, will return to High-Frequency Trading Leaders Forum 2012 to provide the information practitioners are looking for in an open and unbiased environment, highly conducive to the most efficient and effective networking.

With insightful keynote speeches and highly regarded panels, everybody involved in high-frequency trading will gain inside knowledge about the latest technologies that can drastically optimize HFT infrastructures and take a first look at upcoming regulations that could radically change the HFT firms' business model. Topics that will be discussed at High Frequency Trading Leaders Forum 2012 include the movement toward emerging markets, every time more attuned to the use of bots, the regulatory environment, how new technologies are changing the game, including FPGA applications, and a look at the upcoming regulatory changes that will definitely impact how speed traders capture alpha.