It’s the nightmare that never ends for Knight Capital.
Less than three months after a runaway-trading glitch pushed the firm to the brink of bankruptcy, the Jersey City, NJ, brokerage firm was forced to halt trading yesterday when a backup power generator failed in the aftermath of Hurricane Sandy.
“Due to a building emergency [power issues], Knight Capital Americas is asking you to seek an alternate destination for order handling and execution … until further notice,” the firm said in a memo to clients shortly before noon yesterday.
Shares of the firm took a big dip on the initial announcement before heading back into positive territory by the day’s end. The stock ended up 1 cent, closing at $2.63 a share.
Kara Fitzsimmons, a spokeswoman for Knight, told The Post that the outage was the result of “after-effects of Hurricane Sandy,” which has waylaid a number of firms with operations in lower Manhattan and New Jersey.
“In an effort to protect clients, Knight proactively requested that clients” send orders elsewhere “until the matter is resolved.”
Like other firms, Knight, a big market maker, was operating on backup power after the storm slammed the Northeast. Knight went offline just as the banks, brokerages and exchanges were ramping up after a two-day shutdown.
It marked the second time Knight had to route orders to rivals. In August, a software glitch flooded the firm with orders and left it with more than $460 million in losses. Knight was saved when a group of investors injected $400 million to keep it afloat.
Sandy has also knocked out facilities used by major Wall Street firms including Citigroup and Morgan Stanley. Citi yesterday told employees that its 111 Wall St. office along FDR Drive will “remain unavailable for an extended period” due to flood damage.