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The CEO, 57, had knee surgery last Tuesday and hobbled back to work the next day to the chaos emanating from the firm he leads. Knight, headquartered across the Hudson River from Wall Street in Jersey City, N.J., was founded in 1995 and has about 1,400 employees across the U.S. and internationally. Over the weekend, Knight tried, unsuccessfully, to lighten its burden. It asked the Securities and Exchange Commission for an exemption so it wouldn't have to buy back so many of the mistaken trades, a development first reported by The Wall Street Journal. The SEC does allow trading firms to cancel some trades made in error, but it has gotten stricter about what qualifies ever since the notorious "flash crash" of May 2010, when another technical problem sent the Dow Jones industrial average plunging nearly 600 points in five minutes. On CNBC, Joyce said he respected the SEC's decision but added: "This was an error, by any definition this was an error, so we would have liked to see more flexibility." Knight's cash infusion comes from a group of financial firms led by the Jefferies Group, as well as Blackstone, a big private equity firm; the trading firm Getco; Stephens, Stifel Financial and TD Ameritrade. They're essentially paying $1.50 per share, a bargain-basement price. Even with the cash infusion, it's not yet clear that Knight will regain the trust of other key players in the stock market to carry on and survive as a firm. Some of Knight's trading partners last week suspended routing trades through Knight, though some have come back. E-trade on Monday announced it had resumed routing trades through Knight. Online brokerage Ditto Trade said it still wasn't sending trades through Knight but expected to soon. When a public company sells such a big portion of itself, as Knight did Monday, it's usually required to ask shareholders for their permission first. But Knight got an exception after telling the New York Stock Exchange that its financial viability was at stake. Problems such as the one Knight caused last week have been occurring more regularly as the stock market's trading systems come under increasing pressure from traders using huge computer systems. In May the highly anticipated market debut of Facebook was marred when technical problems at the Nasdaq stock exchange delayed the opening of Facebook's trading and kept many investors from knowing if their trades had gone through. Some were left holding unwanted shares. In an irony that now dogs Joyce, he was one of the most vocal critics at the time of Nasdaq's botching of Facebook's stock market debut.
[Associated
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