💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Interactive Brokers reveals $48 million loss from NYSE glitch

Published 06/26/2024, 09:00 AM
Updated 06/26/2024, 10:46 AM
© Reuters. FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 17, 2024.  REUTERS/Brendan McDermid/File Photo
IBKR
-
BRKa
-

(Reuters) -Interactive Brokers on Wednesday disclosed a $48 million loss due to a glitch at the New York Stock Exchange earlier this month that at one point showed a 99% drop in the stock prices of some companies, including Warren Buffett's Berkshire Hathaway (NYSE:BRKa).

The brokerage had filed claims with the NYSE to compensate it for these losses, but the exchange denied its ask, Interactive said.

Outages caused by software and hardware malfunction have become common as trading moved from floors and pits to electronic systems, but glitches can roil markets and frustrate investors. In some cases, they can also invite scrutiny from regulators and disputes with brokers.

Interactive said its losses stemmed from an attempt by its clients to take advantage of the massive drop in Berkshire's stock price.

Customers rushed to snap up Berkshire's Class A shares after the price plunged to $185 from $622,000 each. They placed "buy" orders after trading in the stock was halted, expecting their trades to be fulfilled at a price near $185.

However, after resumption, the clients' trades were executed at prices as high as $741,971.39, Interactive said. Its request for busting trades that were completed at such "anomalously" high prices was rejected by the NYSE, the brokerage added.

© Reuters. FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 17, 2024.  REUTERS/Brendan McDermid/File Photo

Interactive then took over a "substantial" portion of these trades. It is mulling its options, including a legal recourse, but does not expect the losses to have a material impact on its finances, it said.

The NYSE declined to comment. The exchange, which is owned by the Intercontinental Exchange (NYSE:ICE), had attributed the disruption to a technical issue earlier this month.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.