After losing $440 million due to a software bug, Knight Capital Group
has another problem: firms have stopped routing customer orders through them.
both reported that customers have begun sending orders through other market makers.
report says that Fidelity
has begun moving orders to other market makers. The Boston-based firm had 18.3 million brokerage accounts during the first quarter and daily commissionable trades reached an average of 400,000 for the first three months of 2012.
reports that Citigroup
have started rerouting orders as well.
Robert Rutschow, CLSA analyst, underscored the challenges Knight faces.
“We believe Knight Capital is at risk of bankruptcy following the loss and so we are lowering our rating to sell," the analyst said. "The company’s best option at this point is a sale.”
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