• 527 days Will The ECB Continue To Hike Rates?
  • 528 days Forbes: Aramco Remains Largest Company In The Middle East
  • 529 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 929 days Could Crypto Overtake Traditional Investment?
  • 934 days Americans Still Quitting Jobs At Record Pace
  • 936 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 939 days Is The Dollar Too Strong?
  • 939 days Big Tech Disappoints Investors on Earnings Calls
  • 940 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 942 days China Is Quietly Trying To Distance Itself From Russia
  • 942 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 946 days Crypto Investors Won Big In 2021
  • 946 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 947 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 949 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 950 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 953 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 954 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 954 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 956 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Exlusive Video: Knight Capital CEO Joyce Says 'All Hands on Deck'

Bloomberg TV Exclusive: Knight Capital CEO Tom Joyce spoke with Erik Schatzker and Stephanie Ruhle on Bloomberg TV's "Market Makers" this morning about yesterday's trading errors and losses stemming from the breakdown, saying that the company has "all hands on deck." Joyce said, "We understand what the issues are. We're staying in close contact with our clients and counterparties."

Joyce also said that it's "hard to comment" on the firm's dealings with its creditors and that Knight Capital "did not harm any investors...this was an anomaly. You cannot immunize people from making mistakes."

 

Courtesy of Bloomberg Television

 

Joyce on whether Knight Capital will survive:

"On days like yesterday and today, we have a lot of work to do. We have to make sure we work with our counterparties, our clients to get the answers they want and we are pursuing that as we speak and we are also exploring other alternatives such as strategic investments or investors and other financing alternatives. We have work to do and we're doing it now."

On what he means by strategic investments:

"Obviously, if we were having specific conversations I wouldn't be able to tell you that... We know we have some work ahead of us and we are diligently pursuing that, and we're staying in close contact with our clients and counterparties as we get through the situation."

On whether these other financing alternatives will keep Knight Capital in business:

"That's what our goal is, and we're working hard to accomplish that. We have all hands on deck and we understand what the issues are, we are talking to a lot of capable people, people who are in touch with situations like this. So, we're working hard and we have all hands moving forward to address this and resolve this."

On whether any credit lines have been pulled:

"As you might imagine, during the day to day activity, it's hard to comment. Our general counsel would prefer I don't go too deeply into what's going on with the day to day action. So it's one of those things I don't think I can really comment on right now."

On whether there are any firms with which Knight Capital had been trading that are not right now:

"All our clients respect what we did yesterday. They were very happy with us because once we realized we had a problem, we alerted them and got them out of the way. Our clients have a great deal of confidence in us, but much like the questions that were just asked about day to day activity, I can assure you our general counsel would prefer that I not get into any specific details."

On what happened yesterday:

"We put in a new bit of software the night before because we were getting ready to trade the NYSE's RLP program. This has nothing to do with the stock exchange. It had to do with our readiness to trade it. Unfortunately, the software had a fairly major bug in it. It sent into the market a ton of orders, all erroneous, so we ended up with a large error position which we had to sort through the balance of the day. It was a software bug, except it happened to be a very large software bug, as soon as we realized what we had we got it out of the code and it is gone now. The code has been restored. We feel very confident in the current operating environment we've reestablished."

On why it took so long to not only fix the problem, but to identify and take responsibility for it:

"We were talking to our clients right away and got they got out of the way, which is great because nobody else except for us was wounded by this activity. So, we don't think we actually acted in a slow fashion at all because our primary focus was on us alerting our clients and keeping them out of harm's way."

On how Knight Capital's situation compares to the Facebook IPO:

"I know we're in a similar situation, but I would argue that it's apples and baseballs when you compare them because as I said at the time, technology breaks. It ain't good. We don't look forward to it, but technology breaks. What happens next is how you escalate it. We're very proud of the fact that we escalated to it directly to our clients and got them out of harm's way. There are two things over here that we take great pride in which is our client focus and our culture which is so involved with compliance. We have a culture of compliance and client focus and we asserted both of those things yesterday."

On what Knight Capital's situation says about the integrity of the U.S. equity markets:

"If you get involved in the day to take minutia and not invest for the long term, this will give you a headache, no question about it. We're not happy that we added to that pile around days there were difficult for the individual investor. But it is also just affecting us. It does not affect the individual investor and we did not harm any investors and got them out of the web."

On whether he'd buy shares of a company that within a day or two could be wiped out, like Knight Capital:

"Of course not, this was an anomaly. You cannot immunize people from making mistakes. You cannot keep people from doing stupid things whether it is writing some imperfect code or buying the wrong stock at the wrong time. That is what happens when you have a culture of risk. If you do your homework and do the right job, you'll be rewarded over time. If you stay away from the day-to-day minutia and look for the long term, as an equity investor, it will work out."

On whether Knight is still steering clients to other places:

"As you can see behind me, we are open for business today. We are reasonably busy and keeping active. By the end of the day yesterday, many clients had started to route back. We're open for business. We got rid of the bad trade and that freed up a lot of capital. We actually have excess capital right now. We have worked to get ourselves in good shape and communicated that to our clients. Clients are making their decisions with full transparency as to how to interact with us."

On whether voice trading should be brought back:

"This had very little to do with voice trading versus electronic trading. This software problem was an infrastructure problem. It had nothing to do with our quantitative models and nothing to do with our market-making models. This was something that was separate and distinct from trading. It was more of a networking problem as opposed to using quantitative tools to trade."

On Knight Capital's search for more capital:

"It is hard to give anybody a timeline when you are working through it, but we are focused and doing all the work I believe need to be done as we speak. We're kind of pushing ahead and we hope to have the news and then we will share it immediately with our shareholders, our regulators and stakeholders."

On what kind of investor Knight Capital is looking for:

"It is kind of hard to isolate what kind of structure we prefer. We're keeping an open mind and talking to some counterparties and relationships as we speak."

On how to restore confidence in the company's employees:

"We tried very hard over the last decade to build a culture here that people admire and enjoy coming to work and people are supportive and there's teamwork. During the trials and tribulations of the last 48 hours, this team has been nothing short of remarkable and the people at Knight Capital group are a team I am incredibly proud to be a part of."

 

Back to homepage

Leave a comment

Leave a comment