NEW YORK (Reuters) - The Vanguard Group has begun rerouting “a portion of their orders” to Knight Capital Group Inc KCG.N after the announcement of a deal to rescue Knight, a Vanguard spokesman said on Monday.
Knight announced earlier on Monday that a group of investors rescued the firm in a $400 million deal that keeps the company in business.
Blackstone Group LP BX.N, Getco and financial services companies TD Ameritrade Holding Corp AMTD.N, Stifel Nicolas (SF.N), Jefferies Group Inc JEF.N and Stephens Inc purchased preferred shares convertible at $1.50 each for a 73 percent stake in the company, Knight said in a statement just before market open.
Knight’s problems started early last Wednesday when a software glitch flooded the New York Stock Exchange with unintended orders for dozens of stocks, boosting some shares by more than 100 percent and leaving the company with a $440 million trading loss.
As a result, a number of firms, including Vanguard, Fidelity Investments, TD Ameritrade and Scottrade stopped routing orders through Knight. But by Friday, TD Ameritrade and Scottrade resumed routing orders to Knight.
A Fidelity spokeswoman declined to comment on whether the firm had begun rerouting trades through Knight.
Knight shares traded at $3.07, down 98 cents, on the New York Stock Exchange.
Reporting By Jessica Toonkel; Editing by Gerald E. McCormick and Dan Grebler