Friday, August 03, 2012

Dark Knight Capital

In The Dark Knight Rises, the villainous Bane attacks the stock exchange and bankrupts our hero, forcing him to relinquish control of Wayne Enterprises, by uploading a series of massive automatic and fraudulent trades.

Unlikely as it seems, this is eerily reminiscent of  US equity broker Knight Capital losing $440m yesterday. The huge loss came from orders triggered by a software glitch in Knight’s systems that led to huge price swings in dozens of stocks on Wednesday. “It was a software bug, it just happened to be a large software bug,” Thomas Joyce the Chief Executive said on Bloomberg television with fairly spectacular sangfroid.

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