“Knight Capital Group Inc. KCG +3.16% was holding about $7 billion of stocks at one point on Wednesday last week—a far bigger figure than previously known—as a result of errant trades that forced it to seek emergency funding, according to people familiar with the matter.
Knight’s traders worked frantically Aug. 1 to sell shares while trying to minimize losses due to a software problem, ultimately paring the total position to about $4.6 billion by the end of the trading day, the people said.
The position led to a $440 million loss that forced Knight to seek a rescue, agreeing on a $400 million funding package this past weekend from a group of investors.”
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