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Goldman Bought Knight Capital Stock Before Malfunction

Goldman Sachs Group Inc. and Vanguard Group Inc. increased holdings in Knight Capital Group Inc. during the second quarter before the market-making firm lost $440 million on a computer malfunction this month.

Brokerage and asset-management units at Goldman Sachs increased their stakes in Knight Capital by 73 percent to 2.39 million shares, valued at $28.5 million at the end of June, according to a regulatory filing yesterday by the New York-based bank. The subsidiaries’ convertible-debt holdings climbed by $2.5 million to $60.5 million, the filing shows.