The Big Cost of Software Bugs

By Jordan Robertson, Marcus Chan and Mark Milian - 2012-08-03T19:53:28Z

Photograph by Stan Honda/AFP/Getty Images

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Knight's $440 Million Malfunction

Knight Capital Group Inc., one of the biggest American market makers for stocks, is struggling to stay afloat following a software bug that triggered a $440 million loss, an amount that's almost four times what it earned last year. The firm's shares lost 75 percent in two days after the faulty software flooded the market with unintended trades, sending dozens of stocks into spasms.

Founded in 1995, Knight grew during the late 1990s into one of the biggest traders of technology stocks that led the market's surge and subsequent plunge.

With assistance from Whitney Kisling, Nandini Sukumar and Nina Mehta.

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